Binance denied that it has mismanagement of its funds
The cryptocurrency exchange ensured that its clients' funds are properly managed
Binance, the cryptocurrency exchange, has strongly denied the allegations of mismanaging its clients’ funds. The company responded to a Reuters report that claimed it had mixed customer funds with corporate income.
The Reuters report alleged that Binance had violated United States banking regulations, which require client money to be kept separate. According to the report, this mixing of funds occurred on a daily basis during 2020 and 2021, primarily in accounts held at the now bankrupt Silvergate Bank, and the amount involved was estimated to be in the billions of dollars.
Three people with knowledge of Binance’s finances were cited by Reuters as sources, and it was claimed that most of the fund mixing was done in accounts associated with the Binance CEO’s Cayman company. In addition, another account on Silvergate was mentioned to be linked to the conversion of money into the dollar-pegged token Binance USD (BUSD).
However, the Reuters report also noted that there was no evidence that money from Binance clients had been lost or taken.
In the face of these allegations, Binance has strenuously denied any wrongdoing. Patrick Hillmann, Binance’s head of communication, responded to the allegations via Twitter, calling the Reuters report “1,000 words of conspiracy theory”.
Hillmann explained that the basis of the Reuters story was based on the acquisition of BUSD (Paxos) by Binance users, where the term “deposit” was used on the transaction page. However, Hillmann claimed that users were buying a stablecoin redeemable for Paxos, which was clearly stated on the page.
Despite these accusations, the company maintained that it keeps the funds of its users and companies completely separate. Hillmann stated that there is no benefit in responding to these types of sensational stories and that the sources behind the accusations will be known.
It is important to mention that these accusations are added to a lawsuit previously filed by the Commodity Futures Trading Commission against Binance, related to alleged violations of US banking legislation.
(Reference image source: Vadim Artyukhin, Unsplash)
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