Binance, recognized as the largest cryptocurrency exchange worldwide, along with its US affiliate, is currently facing investigations in the United States for a series of alleged crimes. These include accusations of facilitating money laundering and tax offenses. Recent reports have revealed that a high-ranking executive at Binance, who is closely associated with Changpeng Zhao (also known as CZ), operated five bank accounts on behalf of the exchange’s independent US branch.
During the period between 2019 and 2020, Guangying Chen, a close associate of CZ, had control over these accounts, as indicated by records from those respective years. The defunct Silvergate Bank was involved in allowing this arrangement to take place.
Binance’s Alleged Lack of Independence: Revelations from Bank Records and Messages
Despite Binance’s assertions that its US arm operates independently, recent findings suggest otherwise. Messages examined by Reuters shed light on the fact that Binance.US employees had to rely on Chen’s team to handle payment processing, including employee payroll.
According to the Reuters report, it has come to light that Chen, the close associate of CZ, entered into agreements with Silvergate, designating herself as the “Primary Admin User ” for the five bank accounts associated with the US arm of Binance. Notably, one of these accounts was specifically designated for corporate clients. Subsequently, funds from this account were transferred to Merit Peak, a trading firm under Zhao’s control.
The recently discovered bank records and messages shed light on previously undisclosed information, revealing that Binance had significant control over the financial operations of its US business, including its bank accounts at Silvergate. The details provided in these records outline the manner in which this covert access was granted. However, Krishna Juvvadi, the head of the legal department at Binance’s US arm, refuted these allegations, asserting that they have maintained exclusive control over the exchange since its establishment in 2019.
Binance Under Investigation
Binance, the crypto exchange holding the title of the world’s largest trading volume, finds itself entangled in various legal challenges within the United States. The Securities and Exchange Commission (SEC), Internal Revenue Service (IRS), and Department of Justice (DOJ) are conducting investigations into the exchange’s operations.
Despite these investigations, Binance has consistently denied any involvement in illicit activities. The exchange has dismissed Reuters’ investigation as an attempt to spread FUD about the company. The situation remains contentious, with ongoing scrutiny and legal proceedings determining the ultimate outcome.
To Conclude,
This incident has raised questions about the level of autonomy and control that Binance US has, as it appears that a close associate of CZ was involved in crucial financial operations. The discrepancy between Binance’s claims and the revealed messages adds to the ongoing scrutiny surrounding the relationship and operations of Binance and its US affiliate.
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