Ahmed Ali According to a recent Reuters report, it has been revealed that between 2019 and 2020, Binance, a popular cryptocurrency exchange, had control over bank accounts belonging to its US affiliate. These accounts included one that held funds belonging to American clients. The report states that employees of Binance’s US affiliate had to obtain approval from Binance executive Guangying Chen for various payments, including payroll.
Binance U.S. Disputes the Allegations
The report indicates that Guangying Chen, a senior executive at Binance and a close associate of Binance CEO Changpeng Zhao (CZ), was in charge of five bank accounts belonging to Binance’s supposedly independent US affiliate, Binance U.S. Furthermore, it suggests that Chen also managed an account that held funds belonging to American customers.
Bank records cited in the report undermine the claim that Binance’s US affiliate operated independently during the specified period. Additionally, internal company messages mentioned in the report indicate that employees of Binance U.S. sought approval from Chen before processing payments, such as the firm’s payroll. These findings strongly suggest that Binance had significant control over its supposedly independent affiliate.
Binance U.S. spokesperson Christian Hertenstein responded to the allegations, asserting that the affiliate has been completely autonomous since the appointment of CEO Brian Shroder in late 2021. Similarly, Krishna Juvvadi, Binance U.S.’s head of legal, refuted the claim that the parent company controlled its bank accounts.
However, the report points out that Hertenstein did not address the discrepancy between the time period he referred to and the one highlighted by Juvvadi.
Intensified Scrutiny from U.S. Regulators
Coinciding with the recent allegations against Binance and its US affiliate, the US Securities and Exchange Commission (SEC) has taken legal action against the exchange. According to a report by CryptokenTop.com News, Binance is facing 13 charges, including commingling user funds and facilitating the use of its global platform by “high-value US customers.”
These SEC charges follow a lawsuit filed by the US Commodity Futures Trading Commission (CFTC) against Binance and CZ, accusing them of violating trading and derivatives regulations. The CFTC alleges that these violations occurred since 2019, as reported in late March by CryptokenTop.com News.
According to the Reuters report, communications between Binance U.S. executives and Guangying Chen indicate concerns about how American regulators would perceive the control structure that remained in place until early 2021. In one instance, an unnamed Binance U.S. executive suggested that BAM Trading—an entity controlled by CZ—should have separate control to address regulatory concerns.
We invite you to share your thoughts on this story in the comments section below.
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Frequently Asked Questions (FAQs) about Binance, cryptocurrency exchange, US affiliate, control, bank accounts, regulatory scrutiny
Q: What does the report reveal about Binance’s control over its US affiliate’s bank accounts?
A: The report states that between 2019 and 2020, Binance had control over bank accounts belonging to its US affiliate. This includes an account that held funds belonging to American clients. Employees of the US affiliate had to obtain approval from Binance executive Guangying Chen, indicating a lack of independence.
Q: How does Binance U.S. respond to these allegations?
A: Binance U.S. spokesperson Christian Hertenstein claims that since the appointment of CEO Brian Shroder in late 2021, the affiliate has been fully autonomous. However, there is a discrepancy between the time period mentioned by Hertenstein and the one highlighted by Krishna Juvvadi, Binance U.S.’s head of legal.
Q: Are there any legal actions against Binance?
A: Yes, the US Securities and Exchange Commission (SEC) has taken legal action against Binance. The charges include the commingling of user funds and allowing “high-value US customers” to use its global platform. Additionally, the US Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Binance and its CEO CZ, alleging violations of trading and derivatives rules.
Q: Is there any concern about regulatory scrutiny?
A: Yes, the report indicates that Binance U.S. executives were worried about how American regulators would view the control structure in place until early 2021. Communication suggests that they considered separate control for an entity controlled by CZ to address regulatory concerns.
Q: How are users reacting to these developments?
A: User reactions vary, but there is a mix of surprise, skepticism, and concern. Some question Binance’s transparency and independence, while others express worry about the increased regulatory scrutiny and its potential impact on the exchange and its users.
More about Binance, cryptocurrency exchange, US affiliate, control, bank accounts, regulatory scrutiny
- Reuters report on Binance’s control over bank accounts
- SEC charges against Binance
- CFTC lawsuit against Binance
- CryptokenTop.com News article on Binance charges
- Binance U.S. spokesperson’s statement
- Reuters report on Binance U.S. control concerns
6 comments
Wow, this report reveals that Binance had control over its US affiliate’s bank accounts? That’s a serious allegation and could bring some major regulatory trouble.
So, Binance’s US affiliate wasn’t so independent after all? Those bank records and company messages seem to suggest otherwise. Can’t ignore the signs of control.
Binance spokesperson says everything is fine now, but what about the discrepancy between the time periods mentioned? Something doesn’t add up here.
The timing of these allegations and the SEC taking action against Binance is quite interesting. Could there be a connection? The plot thickens.
Binance just can’t catch a break. First the CFTC lawsuit, now more trouble with bank accounts. This regulatory scrutiny is getting intense.
Binance execs discussing control structure and separate control for CZ’s entity? It seems they were worried about how regulators would view the situation. Trying to cover their tracks, perhaps?