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Binance top executive, Guangying Chen, reportedly controlled five bank accounts of its independent U.S. subsidiary between 2019 and 2020, Reuters reported on June 5, citing bank records.
The defunct bank Silvergate Bank reportedly authorized Chen as the “Primary Admin User” of the five bank accounts, including one that held American customers’ funds and an account for corporate clients.
During this period, Binance.US staff sought the Chen team’s approval to process payments and cover its payroll, Reuters cited company messages.
Reuters reported that Binance commingled user funds with corporate funds in 2020 and 2021. Binance denied this report, calling it a “conspiracy theory.”
Binance.US’ contradictory statements
The new report contradicts earlier claims made by Binance.US that it operates independently of Binance. In April, Binance.US’s head of legal, Krishna Juvvadi, told Reuters that staff of the exchange’s operator, BAM Trading, had exclusive control of the platform’s bank account since 2019.
With the new revelations, Reuters reported that a Binance.US spokesperson said that the current CEO, Brian Shroder, has had complete control and access to the accounts since he took over in 2021.
Binance and Binance.US were yet to respond to CryptoSlate’s request for comment as of press time.
Binance faces increased scrutiny from several regulatory authorities in the United States over its compliance with local regulations.
The Commodity Futures Trading Commission (CFTC) sued Binance and its CEO over commodities law violations. The regulator alleged that the exchange illegally facilitated trading derivative orders on commodities for U.S. citizens.
The Department of Justice (DOJ) is also investigating the crypto exchange to determine whether Binance or its executives circumvented sanctions around Russia’s invasion of Ukraine.
Meanwhile, the exchange has denied wrongdoing and labeled the CFTC’s lawsuit as “unexpected and disappointing.” The exchange added that it complies with regulations and would continue cooperating with regulators.
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