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Binance US Downplays Analytic Reports Linking it to Fraudulent Crypto Exchange

Binance US dismissed reports drawing parallels between its operations and fraudulent exchanges now battling bankruptcy. 

Binance US downplayed allegations that Binance Holdings Ltd retains secretive access to users’ funds. Instead, Binance US restated that only authorized employees can access bank accounts. 

Although affiliated with the global crypto exchange, Binance US decried efforts by analytic reports comparing it to bankrupt platforms. While noncommittal on the exchanges involved in fraudulent operations, Binance US distanced from the parallels drawn to such entities. 

Binance US Denies Secretive Ties with Binance Holdings 

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Binance US denied allegations of shadowing policies drafted by Binance Holdings Ltd. Instead, illustrated, they are separate entities running autonomously with different management. In a February 17 tweet, Binance US  disputed the existence of comparison by providing evidence supporting countering the allegations. 

Binance US indicated that its current leadership includes previous employees from the US federal agencies, including the Department of Justice (DOJ), the Federal Bureau of Investigation (FBI), the Securities and Exchange Commission (SEC), and the Federal Reserve Bank of New York (NY Fed). 

The crypto exchange indicated that its leadership team drew members from previous staff from the abovementioned agencies. Binance US stressed its expertise and awareness of regulations to steer the platform while complying with US laws. 

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Questioning the Involvement of Merit Peak 

 Binance US confronted allegations initially captured in a Reuters report claiming Binance Holdings concealed secret access to bank accounts of its purported independent US partner. The publication illustrated that the first quarter of 2021 saw over $400M remitted from the Binance US account to Merit Peak Ltd. The publication identified the trading firm as affiliated with Binance Holdings chief executive Changpeng Zhao.

Binance US clarified that Merit Peak operated on its platform as a market maker. The US crypto exchange confirmed that Merit Peak activities were terminated in 2021. Binance US indicated that it exercises transparency by listing all parties involved in the market maker initiative, with firms competing fairly on the available rebates. 

Addressing Allegations of Rerouting Customers’ Resources

Binance US emphasized that only authorized employees execute transactions on their bank accounts. 

The US crypto exchange emphasized that its operations do not involve commingling users’ funds with its resources. It challenged further scrutiny of its operations to ascertain that it does not replicate the collapsed FTX misdeed of rerouting the customers’ resources. 

Binance US declared never replicating the FTX-Alameda Research saga of lending out users’ funds. Also, it reiterated running a robust reserve system subjected to regulatory assessment and audits overseen by government entities.

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The parallel drawn on Binance US and fraudulent crypto exchange coincides with the SEC enforcing actions against key crypto operators, including Kraken over the staking services, Terraform Labs, and Paxos for BUSD issuance. 

The scrutiny of Binance US is inevitable given the current stance by SEC chair Gary Gensler to propose the amendment of federal custody rules to include all cryptos.  

Editorial credit: salarko / Shutterstock.com


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Stephen Causby

Stephen Causby is an experienced crypto journalist who writes for Tokenhell. He is passionate for coverage in crypto news, blockchain, DeFi, and NFT.

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