Recent reports suggest that Binance moved more than $400 million from its purportedly independent US partner to a trading business headed by Changpeng Zhao, the founder of the company. According to quarterly data seen by Reuters, more than $400 million was transferred from California-based Silvergate Bank’s Binance.US account to Merit Peak, a CZ-linked trading company, in the first three months of 2021.
BAM Trading was the account’s registered name on Binance.US. Records suggest that moves to Merit Peak started in late 2020. Be aware that in February 2022, the United States Securities and Exchange Commission (SEC) began an investigation into possible connections between Binance.US and the same trading company. During this investigation, the SEC closely examined the connections between Binance.US and the trading companies Sigma Chain AG and Merit Peak.
Payments are “Unexpected”
Merit Peak “no longer exchanges or offers any facilities on the Binance.US platform,” based on the Binance.US representative, who also claimed that the report contained “stale information.” Moreover, she asserted that only Binance.US workers have access to the bank accounts of American businesses.
According to Reuters, papers revealed that officials at Binance.US voiced worry about the loss of cash because the payments were occurring without their knowledge. In a letter purportedly sent to a Binance financial officer in late 2020, Catherine Coley, the CEO of Binance.US at the time, demanded an explanation for the payments, calling them “unexpected” and asserting that “no one addressed them.”
US Authorities are Looking into the Matter of Binance
Earlier this year, US authorities sent subpoenas on American hedge funds and market-making companies who do business with Binance, requesting documents of their correspondence with the exchange. The subpoenas were a component of a wider investigation investigating possible money laundering offenses by Binance. It was covered by Bloomberg in June of last year. The SEC is reportedly looking into whether Binance’s 2017 coin ICO for its BNB token constituted an unregistered securities sale.
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