Binance US Refutes Reports Comparing It to Fraudulent Crypto Exchanges
Binance US has refuted reports that draw parallels between it and “fraudulent exchanges that have gone bankrupt.” The U.S.-based crypto trading platform stressed that “only Binance.US employees” have access to its bank accounts, denying the allegation that global crypto exchange Binance has “secret access.”
Clarifications by Binance US
Binance US, a U.S.-based cryptocurrency trading platform affiliated with the global crypto exchange Binance, has refuted reports that compare it to fraudulent and bankrupt crypto exchanges. Binance and Binance US claim that they are separate entities with different management teams.
“There have been many attempts to draw parallels between Binance.US and fraudulent exchanges that have gone bankrupt,” the official Twitter account for Binance US tweeted Thursday. “There is no comparison,” the exchange stressed and proceeded to provide some evidence to support its claims.
Firstly, Binance US explained that its leadership is comprised of ex-employees of the U.S. Department of Justice (DOJ), the Securities and Exchange Commission (SEC), the Federal Bureau of Investigation (FBI), and the Federal Reserve Bank of New York (NY Fed). The exchange detailed:
Our leadership team is staffed with former DOJ, SEC, FBI, and NY Fed employees who are committed to operating a platform that is safe and abides by U.S. laws and regulations.
Binance US then addressed the allegation, first published by Reuters, that Binance had “secret access to a bank account belonging to its purportedly independent U.S. partner.” The publication further alleged that over the first three months of 2021, more than $400 million flowed from the bank account of Binance US to Merit Peak Ltd., a trading firm managed by Binance CEO Changpeng Zhao (CZ).
“While there was a market-making firm named Merit Peak that operated on the Binance.US platform, it stopped all activity on the platform in 2021,” Binance US claimed. “We list our competitive and transparent market maker program on our website, which shows that firms fairly compete for rebates.” The exchange insisted:
Only Binance US employees have access to Binance US bank accounts. Period.
In addition, Binance US assured the crypto community that it does not make use of customer funds, a subject that is heavily scrutinized following the collapse of FTX, the exchange that allegedly commingled customer funds. Binance US emphasized:
Binance US has never — and will never — trade nor lend out customer funds. Binance US always maintains 1:1 reserves and is subject to regular audits and regulatory reporting by government entities.
The SEC recently took action against several firms in the crypto sector, including Kraken over its staking program, Paxos over its stablecoin Binance USD (BUSD) issuance, and Terraform Labs for defrauding investors. Last week, SEC Chairman Gary Gensler proposed amending federal custody rules to cover all crypto assets.
Tags in this story bankrupt crypto exchanges, Binance, Binance US bank accounts, Binance US clarifications, Binance US customer funds, Binance US CZ, Binance.us, Changpeng Zhao, fraudulent crypto exchanges
What do you think about the clarifications provided by Binance US? Let us know in the comments section below.
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