In response to a Reuters report on Tuesday that implicated Binance in allegedly commingling customer funds with revenue, the leading cryptocurrency exchange is pushing back strongly.
According to Reuters, the company mixed customer and corporate monies in the years 2020 and 2021. Binance has dismissed these allegations as groundless and weakly substantiated, with Chief Strategy Officer Patrick Hillmann taking to Twitter to discredit the report.
“They then pinned 1000 words of conspiracy theories (which we explained were false) with zero evidence other than a ‘former insider,” Hillmann vented.
Binance denies Reuters’ allegations
The company, while admitting some past regulatory shortcomings, argued that the report had relied on anonymous sources and lacked tangible evidence.
Reuters’ report had suggested that Binance regularly commingled billions of dollars in accounts held at Silvergate Bank, a US bank which has since collapsed.
As a particularly pointed example, Reuters reported that on February 10, 2021, Binance had allegedly mixed $20 million from a corporate account with $15 million from a customer account, citing purported bank records as their source.
Binance spokesperson, Brad Jaffe, vehemently denied these allegations, clarifying that the Silvergate Bank accounts were exclusively utilized for facilitating crypto purchases by users, and were never repositories for user deposits.
“There was no commingling at any time because these are 100% corporate funds,” Jaffe emphasized.
This accusation arrives hot on the heels of a lawsuit against Binance by the U.S. Commodity Futures Trading Commission (CFTC) in March. The lawsuit alleges that Binance operated an “illegal” exchange and possessed a “sham” compliance program. Notably, the CFTC complaint also hinted at the alleged commingling of funds by certain Binance entities.
As for further comments on the Reuters report, a Binance spokesperson directed inquiries to Hillmann’s tweets.
In defense of Binance’s operations, Hillmann stated in subsequent tweets that Binance maintains “user and corporate funds on completely separate ledgers.”
However, his statements did not explicitly deny the possibility of funds commingling, leaving a degree of ambiguity around the company’s exact practices.
We’ve addressed this on multiple occasions. We keep our user and corporate funds on completely separate ledgers. There is declining ROI on responding to these types of tabloid stories. We know who their sources are and @Reuters will be embarrassed when it becomes public.
— Patrick Hillmann (@PRHillmann) May 23, 2023
