Binance Transferred $400 Million From Binance US To Trading Firm Merit Peak: Reuters

According to Reuters, Binance allegedly obtained covert access to a bank account belonging to a U.S.-based partner and moved more than $400 million from that account to a trading firm run by its CEO Changpeng Zhao. 

The transfers occurred over the initial three months of 2021, beginning late in 2020, with the funds moving from Binance’s account at Silvergate Bank in the U.S. to Merit Peak Ltd., a trading firm.

The report does not specify whether the transferred funds belonged to U.S. customers or the reasons for the transfers, and the executives at the U.S. firm were reportedly uneasy about the transfers because they were not informed about them. Binance.US spokesperson Kimberly Soward told Reuters that the report contained outdated information but did not address the transfer queries. 

Parent company Binance, as well as Zhao and Prime Trust, a custodian firm that was listed as holding customer funds for the U.S. exchange, did not respond to Reuters. Silvergate informed Reuters that it does not provide individual customer comments.

Binance.US has acknowledged that the firm Merit Peak, which was the focus of a Reuters report, conducted operations on its exchange platform.

Binance.US, the US arm of Binance, has confirmed that the market-making firm Merit Peak, alleged to have received $400m from Binance secretly, operated on its platform. Binance.US clarified that Merit Peak had ceased all activities on the platform in 2021.

The Reuters report had claimed that the parent company of Binance had transferred hundreds of millions of dollars to Merit Peak from a Binance.US account at Silvergate Bank.

Binance.US stated that it never traded or lent out customer funds and that only its employees had access to its bank accounts. It also claimed to be fully reserved and subject to regular audits.