Canada News on Cryptocurrency The US partner of global cryptocurrency exchange Binance has confirmed that a trading firm managed by Binance CEO Changpeng Zhao operated as a market maker on its platform. Reuters reported on Thursday that Binance had secret access to a bank account belonging to its purportedly independent US partner and transferred large sums of money from the account to the trading firm, Merit Peak Ltd.
Merit Peak Ltd is a market maker that Zhao founded in early 2019. The firm has been registered in the US since January and is reportedly in the process of obtaining a Bitlicense, which would allow it to operate as a regulated cryptocurrency exchange.
In response to allegations that it has been laundering money through its US affiliate, Binance.US has referred CNN to a Thursday tweet that reads: “ONLY Binance.US employees have access to Binance.US bank accounts. Period.” This tweet emphasizes the line that reads: Canada News on Cryptocurrency
“Binance.US is a fully independent company that operates as our US partner.” The global Binance exchange is not licensed to operate in the United States, but the transfers to Merit Peak revealed by Reuters suggest that Binance controlled the finances of Binance.US, despite saying publicly that the American entity is “fully independent” and operates as its “US partner.”
Binance transferred over $400 million from the account at California-based Silvergate Bank to Merit Peak between January and March 2021, Reuters reported on Thursday. Before that story’s publication, Binance.US had told Reuters that the account at Silvergate Bank was used to store funds for its customers, without giving further details. Binance.US’s executives were concerned by the outflows from the Silvergate account to Merit Peak.
A spokesperson for the global Binance exchange, which did not respond to Reuters’ questions for the article on Thursday, told CoinDesk that the transfers were “a Binance.US issue.”
The activities of crypto platforms’ market makers – firms that typically buy and sell assets at exchanges to deepen trading volumes – have come under growing scrutiny from U.S. financial regulators since the collapse of major exchange FTX in November.
The spokesperson for the global Binance exchange, which did not respond to Reuters’ questions for the article on Thursday, told CoinDesk that the transfers were “a Binance.US issue.”
The activities of crypto platforms’ market makers – firms that typically buy and sell assets at exchanges to deepen trading volumes – have come under growing scrutiny from U.S. financial regulators since the collapse of major.
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