According to Reuters, Guangying Chen, a top executive at Binance, reportedly controlled five bank accounts of the exchange’s independent U.S. subsidiary between 2019 and 2020. Bank records reportedly show that Silvergate Bank authorized Chen as the “Primary Admin User” of the five bank accounts. One of the accounts held American customers’ funds, while another was for corporate clients.
Approval Sought for Payments and Payroll
During this period, Binance.US staff reportedly sought approval from Chen’s team to process payments and cover payroll. This new report contradicts earlier claims made by Binance.US that it operates independently of Binance. In April, Binance.US’s head of legal, Krishna Juvvadi, told Reuters that staff of the exchange’s operator, BAM Trading, had exclusive control of the platform’s bank account since 2019.
Binance Denies Reports of Commingling Funds
Reuters also reported that Binance commingled user funds with corporate funds in 2020 and 2021, which the exchange denied, calling it a “conspiracy theory.” A Binance.US spokesperson said that the current CEO, Brian Shroder, has had complete control and access to the accounts since he took over in 2021.
Increased Regulatory Scrutiny for Binance
Binance faces increased regulatory scrutiny from several authorities in the United States over its compliance with local regulations. The Commodity Futures Trading Commission (CFTC) sued Binance and its CEO over commodities law violations, alleging that the exchange illegally facilitated trading derivative orders on commodities for U.S. citizens. The Department of Justice (DOJ) is also investigating the crypto exchange to determine whether Binance or its executives circumvented sanctions around Russia’s invasion of Ukraine.
Binance has denied wrongdoing and labeled the CFTC’s lawsuit as “unexpected and disappointing.” The exchange maintains that it complies with regulations and will continue cooperating with regulators. As of press time, Binance and Binance.US have yet to respond to requests for comment from CryptoSlate.