Binance denies allegations and calls Reuters report “1000 words of conspiracy theories.”

Binance, one of the leading cryptocurrency exchanges, has denied allegations of mismanaging customers’ funds

According to the Reuters report, which cited insiders with knowledge of Binance’s finances, the crypto exchange was accused of commingling customer funds with its corporate revenue during 2020 and 2021.

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The alleged fund mismanagement was said to have taken place on a daily basis, primarily involving accounts held at Silvergate Bank, which has since declared bankruptcy. The report suggested that the amount of funds mixed reached billions of dollars.

Furthermore, the report claimed that user funds were directed into a Silvergate account owned by Key Vision Development, a company based in Seychelles and owned by Binance CEO Changpeng Zhao. Binance reportedly informed Silvergate that the purpose of the Key Vision account was to collect non-US dollar contributions from international clients.

The Reuters report also mentioned another Silvergate-based account associated with a Cayman Islands firm linked to the Binance CEO, allegedly used to convert funds into the dollar-linked token Binance USD (BUSD). However, it emphasized that there was no evidence that Binance client funds were lost or misappropriated.

In response to these serious allegations, Binance’s chief of communication, Patrick Hillmann, addressed the issue on Twitter, dismissing the Reuters report as “1000 words of conspiracy theories.”

Hillmann clarified that the claim was related to user deposit-based USD minting, where users purchased a stablecoin redeemable by Paxos, a fact explicitly stated on the relevant page.

It is worth noting that these allegations against Binance regarding potential violations of US banking laws emerged not long after the Commodity Futures Trading Commission (CFTC) filed a lawsuit against the crypto exchange and its CEO.

The crypto exchange continues to stand by its commitment to compliance with regulations and maintaining the integrity of customer funds.

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