Key Takeaways:
- Binance transferred $400 million from the bank account of Binance US.
- Binance does not have the necessary licences to operate in the United States.
Banking records reveal that cryptocurrency exchange Binance had concealed access to a bank account associated with its allegedly independent US partner and shifted significant amounts of money from the account to a trading firm managed by Binance CEO Changpeng Zhao.
The funds were transferred from BAM Trading’s Silvergate Account to Binance between January and March 2021, according to the Reuters investigation. The organization in charge of running Binance US is known as BAM Trading. The U.S. Securities and Exchange Commission (SEC) is looking into Merit Peak, a trading company, because of its connections to Binance.
In the first three months of 2021, Binance saw a flow of more than $400 million. According to data for the quarter, which was examined by Reuters, a US account at California’s Silvergate Bank was transferred to this trading company, Merit Peak Ltd.
Although claiming that Binance.US is completely independent and functions as its “US partner,” the money transfers imply that the global Binance exchange, which lacks a licence to do business in the US, was in charge of Binance US’s finance. In connection with underway inquiries into possible violations of financial regulations, such as whether Binance is using the American exchange as a front for conducting business in the United States.
It is important to recall that prosecutors at the U.S. Department of Justice have been looking into Binance since 2018 for possible violations of American anti-money laundering laws and sanctions. They were divided over whether it was the right time to wrap up the investigation, according to a December report from Reuters.
According to responses examined by Reuters, Binance’s US executives were worried about the outflows because the transfers were occurring without their knowledge. In late 2020, Catherine Coley, the CEO of Binance.US at the time, wrote to a finance officer of Binance seeking an explanation for the payments, calling them “unexpected” and asserting that “no one addressed them.”
Binance has been making a lot of headlines lately. Recently, according to a report from blockchain analytics company Elliptic, Binance and Huobi froze $1.4 million in cryptocurrency tied to the Harmony Bridge attack.
