Key Takeaways

  • Reuters published an article on May 23 that stated that Binance allegedly commingled customer money based on an insider scoop.
  • Binance denies the allegations, stating that despite regulatory shortcomings, Binance keeps customer and personal funds on two separate ledgers.

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Binance, the world’s largest cryptocurrency exchange by trading volume, is staunchly denying allegations made by Reuters that it commingled customer funds with its own revenue in 2020 and 2021. Patrick Hillmann, Binance’s chief strategy officer, dismissed the report on Twitter as conspiratorial and lacking substantive evidence, countering accusations sourced from a “former insider.”

The Reuters report claimed that Binance frequently commingled billions of dollars in accounts it held at the now-defunct Silvergate Bank. The news outlet, citing bank records, alleged that in one instance, Binance blended $20 million from a corporate account with $15 million from an account containing customer funds. 

Commingling funds is when a company mixes customer funds with personal funds, preventing the proper tracking of client money in case of unexpected loss or other instances, according to Cornell Law. 

Hillman further stated that “there’s no reason for a respected news outlet like Reuters to continue making stuff up,” as the news publication has been going after Binance a few times for alleged money laundering and other related accusations. 

The allegations come amid a legal battle with the U.S. Commodity Futures Trading Commission (CFTC) that alleged that certain Binance entities commingled funds. In March, the CFTC sued Binance, claiming that “for years, Binance knew they were violating CFTC rules, working actively to both keep the money flowing and avoid compliance.”

In a response to Reuters, Brad Jaffe, a Binance spokesperson, clarified that the accounts at Silvergate Bank were not used to accept user deposits but were instead used to facilitate user purchases of cryptocurrencies. Jaffe stated that “there was no commingling at any time because these are 100% corporate funds.” Founder of Bitinning Kashif Raza summarized on Twitter:

Hillmann further defended Binance, insisting that “user and corporate funds are kept on entirely separate ledgers.” While he did not categorically deny the practice of fund commingling, Reuters did, stating: 

“Reuters found no evidence that Binance client monies were lost or taken.”

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