Key Takeaways
- Reuters published an article on May 23, claiming that Binance had mixed customer money based on an insider scoop.
- Binance has denied the allegations, saying that Binance keeps customer and personal funds in two separate ledgers.
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Binance, the world’s largest cryptocurrency exchange by trading volume, has strongly denied allegations made by Reuters that it mixed customer funds with its own revenue in 2020 and 2021. Patrick Hillmann, the chief strategy officer at Binance, Were dismissed the Twitter report appears to be conspiratorial and lacks substantive evidence, against accusations that come from a “former insider.”
We have discussed this many times. We keep our user and corporate funds in completely separate ledgers. There is a reduced ROI in responding to these types of tabloid stories. We know who they come from and @Reuters Shame on you for making it public.
– Patrick Hillman (@PRHillman) May 23, 2023
The Reuters report MANILA that Binance regularly commingled billions of dollars in accounts it held at the now-defunct Silvergate Bank. The news outlet, citing bank records, said that at one point, Binance mixed $20 million from a corporate account with $15 million from an account containing customer funds.
The mixing of funds is when a company mixes the customer’s funds with personal funds, which prevents proper tracking of the client’s money in case of unexpected loss or other instances, ACCORDING to Cornell Law.
Hillman added that “thThere is no reason for a respected news outlet like Reuters to continue making things up,” the news publication said. following Binance a few times for alleged money laundering and other related accusations.
The allegations come amid a legal battle with the US Commodity Futures Trading Commission (CFTC) alleging that some Binance entities have mixed funds. In March, CFTC sued Binance, claims that “for years, Binance has known they were violating CFTC rules, actively working to keep money flowing and avoid compliance.
In a response to Reuters, Brad Jaffe, a spokesperson for Binance, clarified that Silvergate Bank accounts are not used to receive user deposits but are instead used to facilitate user purchases of cryptocurrencies. Jaffe stated that “there is no partnership at any time because this is 100% corporate funding.” Bitinning founder Kashif Raza summed it up on Twitter:
Binance Spokesperson previously said:
When users send money to the account, he said, they are not depositing the funds but buying the special dollar linked to the crypto-token, BUSD.
This process is “the same thing as buying a product from Amazon,” Jaffe said.
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— Kashif Raza (@simplykashif) May 23, 2023
Hillmann further defended Binance, insisting that “user and corporate funds are kept in completely separate ledgers.” While he did not deny the practice of mixing funds, Reuters did, saying:
“Reuters found no evidence that Binance client money was lost or taken.”
