It’s been an interesting ~12 months for crypto’s largest exchange, Binance:
They were exposed for having questionable ties to the always controversial Justin Sun.
They were under investigation by the SEC for a wide range of possible transgressions.
They were accused of serving as a conduit for the laundering of $2.35 billion in illicit funds.
Their deal to acquire Voyager blew up, and the SEC began poking around Binance.US.
Paxos was ordered to stop issuing Binance’s BUSD stablecoin.
And the CTFC is on their case as well.
Now, we have yet another interesting report on Binance, this time coming from their frequent antagonist Reuters.
Commingling Of Customer Funds
The use of “commingling” and “customer funds” in the same sentence sends shivers down the spine of anybody who had money in FTX.
If Reuters is to be believed, it happened at Binance as well.
According to sources with knowledge of Binance’s financial dealings and bank records from 2020 and 2021 seen by Reuters:
Billions of dollars and commingling happened almost daily
This commingling happened in a CZ (Binance’s CEO) controlled account at the now defunct Silvergate bank
Binance then converted these funds into their BUSD stablecoin
The motives behind these moves were two-fold:
To hide money from the tax man
To get money out of banks, which CZ distrusted
Commingling user funds is extremely illegal and obviously wouldn’t help their case with the regulators. So, as is to be expected, Binance vehemently denied the charges.
Let me explain just how desperate a journalist @Reuters is to publish a negative story. The whole base of their story this morning, is that when users purchased BUSD (Paxos) from Binance, they were taken to a transaction page that had the term “deposit” on it. Users were making a… twitter.com/i/web/status/1…
— #Patrick Hillmann (#@PRHillmann)
12:32 PM • May 23, 2023
FUD or Facts?
In crypto, where there is smoke, there is often fire. And when considering the FTX blowup, all the concerning stories surrounding Binance, and the fact that they “mistakenly” mixed user funds earlier this year, this smoke is reaching forest fire levels.
