The cryptocurrency exchange Binance (Binance) received another negative report from Reuters (Reuters) on the evening of the 23rd. It further believes that Binance violated the US regulations on the deposit of customer funds.
Reuters: Binance used to mix customer funds with corporate accounts
According to the text of the report, Reuters quoted people familiar with Binance’s financial situation as saying that Binance will manage client funds and company accounts in Silvergate Bank’s account from 2020 to 2021, and the amount of this part of the funds is as high as several figures. billion dollars .
While Reuters wasn't able to verify the full set of accounts, they found bank records showing that on Feb. 10, 2021, Binance combined $20 million in a company account with $20 million in an account that received client funds. $15 million mixed together.
John Reed Stark, former head of the U.S. Securities and Exchange Commission’s (SEC) Office of Cyber Enforcement, believes that co-managed funds will obscure funds records and put customer assets at risk:
Binance customers shouldn't need a forensic accountant to find out where their money is.
Binance chief rebuts Reuters report
Binance Chief Strategy Officer Patrick Hillmann quickly refuted Reuters' remarks on Twitter. First, Patrick believed that the funds in the Reuters report were "user deposits" were not established. This part of the funds was the funds when users purchased the Stablecoin BUSD , and the act of buying BUSD is not a deposit:
(Reuters) The entire report is based on the fact that when users purchase BUSD provided by the issuer Paxos, it is a deposit behavior, but Binance users do not have the word "deposit" on the BUSD transaction page, and customers are also told that it is Buying the redeemable Stablecoin BUSD.
Then, Patrick criticized the lack of rigor in the Reuters report, only citing "former insiders" for making negative reports on Binance without evidence:
The story was so flimsy that they had to preface the article by stating: "Reuters found no evidence that Binance customer funds were lost or taken." to insulate oneself from defamation suits.
And, after this statement, they wrote another 1,000-word conspiracy theory without any evidence except for a "former insider".
However, Patrick's rebuttal was also quickly discussed by the community. Solana's chief strategy officer, Austin Federa, questioned Patrick's response, thinking that Patrick did not directly refute Reuters' view that "Binance confuses customers and company funds" or issued a formal statement :
Your statement above, and your statement to Reuters, does not actually indicate anywhere that "Binance is not mixing user and company funds".
