In December 2019, a Binance.US employee told Coley that Silvergate wanted her to sign a banking resolution, a document that defines a firm’s banking relationship, to “make sure it is ok” for Chen to manage Binance.US’s bank accounts, according to messages exchanged between Binance.US employees. regulators’ scrutiny away from the global exchange. Reuters reported last year that, in fact, Zhao created Binance.US as a de-facto subsidiary to draw U.S.
But Binance.US said it operated solely as a “US partner” of Binance. Zhao owned BAM Trading through layers of offshore companies, company documents show. ‘PRIMARY ADMIN USER’ The Binance.US trading platform was launched by its operating firm, BAM Trading, in mid-2019 under chief executive Catherine Coley. Binance denied mixing customer deposits and company funds, saying that users who sent money to the account were not making deposits but rather buying Binance’s bespoke dollar-linked crypto token. financial rules that require client money to be kept separate. Juvvadi said an investigation Binance.US conducted into Reuters’ previous findings found they were “simply not true.” Reuters also reported on May 23 that Binance commingled its customers’ funds with its corporate revenues in Merit Peak’s Silvergate account, in breach of U.S. Binance.US has said the trading firm, Merit Peak, was withdrawing its own funds, money that derived from its trading activity on the exchange. Reuters has previously reported that a deputy of Chen’s had access to one Binance.US Silvergate account and that the account transferred more than $400 million in 2021 to a trading firm controlled by Zhao. The CFTC had no comment for this article. Zhao called the civil charges an “incomplete recitation of facts.” regulations designed to protect investors. Commodity Futures Trading Commission in March charged Binance and Zhao with willful evasion of commodities laws by “intentionally structuring entities” to avoid U.S. By secretly retaining control over Binance.US’s finances, Zhao ensured he could direct the company’s expansion in the American crypto market – one of the world’s biggest – while keeping it apart from his global exchange that was under scrutiny from U.S.
operations are facing ever-closer attention in Washington. Binance and Silvergate, which collapsed in March and is winding down operations, did not respond to requests for comment. Hertenstein did not explain the discrepancy in the time periods given by him and Juvvadi. In response to questions for this article, however, a Binance.US spokesperson, Christian Hertenstein, said that since the company’s current chief executive, Brian Shroder, took over in late 2021, “no one other than Binance.US officials have had control or access to Binance.US accounts.” Its head of legal, Krishna Juvvadi, told Reuters in April that employees of Binance.US’s operator, BAM Trading, had “exclusive control” since its founding in 2019. business’s finances extended across its bank accounts at Silvergate and detail how this secret access was granted.īinance.US has denied that Binance ever operated its bank accounts. The previously unreported bank records and messages show that Binance’s management over the U.S. The new findings offer further detail into how Binance exercised tight control over Binance.US, despite both firms maintaining that they have always operated independently. US, had to ask Chen’s team to process payments, even to cover the firm’s payroll, company messages show. This allowed Chen and her deputies to move funds held in the bank accounts. lender Silvergate Bank authorized the executive, Guangying Chen, a close associate of Binance CEO Changpeng Zhao, to operate the accounts in 20, according to records from those years. affiliate, including an account that held American customers’ funds, bank records show. A senior Binance executive was the main operator for five bank accounts belonging to the giant cryptocurrency exchange’s purportedly independent U.S.
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