Binance US Refutes Reports Comparing It To Fraudulent Crypto Exchanges CryptoBlog

Binance US Refutes Reports Comparing It To Fraudulent Crypto Exchanges CryptoBlog

Binance US has refuted reports that draw parallels between it and “fraudulent exchanges that went bankrupt”. The US-based crypto trading platform pointed out that “only employees of Binance.US” have access to its bank accounts, denying the claim that global crypto exchange Binance has “secret access”.

Binance US Clarifications

Binance US, a US-based cryptocurrency trading platform affiliated with global crypto exchange Binance, has refuted reports that compare it to fraudulent and bankrupt crypto exchanges. Binance and Binance US claim that they are separate entities with different management teams.

“There have been many attempts to draw parallels between Binance.US and the rogue exchanges that went bankrupt,” the official Binance US Twitter account tweeted on Thursday. “There is no comparison,” the exchange pointed out and provided evidence to back up their claims.

First, Binance US explained that its leadership is made up of former employees of the US Department of Justice (DOJ), the Securities and Exchange Commission (SEC), the Federal Bureau of Investigation (FBI) and the Federal Reserve Bank of New York. (New York Fed). The detailed exchange:

Our leadership team is comprised of former DOJ, SEC, FBI, and New York Fed employees who are committed to operating a platform that is secure and compliant with U.S. laws and regulations.

Binance US then addressed the allegation, first published by Reuters, that Binance had “secret access to a bank account belonging to its allegedly independent US partner”. The post further alleged that in the first three months of 2021, more than $400 million moved from Binance US bank account to Merit Peak Ltd., a trading company run by Binance CEO Changpeng Zhao (CZ ).

“While there was a market making company named Merit Peak that operated on the Binance.US platform, it stopped all activity on the platform in 2021,” Binance US said. “We list our competitive and transparent market maker program on our website, which shows that companies are competing for discounts.” The exchange insisted:

Only Binance US employees have access to Binance US bank accounts. Period.

Additionally, Binance US has assured the crypto community that it does not use client funds, a topic that is under heavy scrutiny following the collapse of FTX, the exchange that allegedly shuffles client funds. Binance US pointed out:

Binance US has never – and will never – trade or lend funds to its customers. Binance US still maintains 1:1 reserves and is subject to regular audits and regulatory reporting by government entities.

The SEC recently took action against several companies in the crypto industry, including Kraken for its staking program, Paxos for its Binance USD (BUSD) stablecoin issuance, and Terraform Labs for defrauding investors. Last week, SEC Chairman Gary Gensler proposed changing federal custody rules to cover all crypto assets.

What do you think of the clarifications provided by Binance US? Let us know in the comments section below.

Kevin Helms

An economics student from Austria, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests include Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

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