24th May 2023 – (New York) Binance, a major cryptocurrency exchange, is disputing a recent Reuters report alleging that it mixed customer funds with revenue in 2020 and 2021. Binance’s chief strategy officer, Patrick Hillmann, called the story “weak” and accused Reuters of publishing “1000 words of conspiracy theories” with no evidence beyond a “former insider.” Hillmann acknowledged that Binance has had regulatory shortcomings in the past, but he vehemently denied the allegations made in the Reuters report.
According to unnamed sources cited by Reuters, Binance mixed billions of dollars almost daily in accounts held at Silvergate Bank, a now-collapsed U.S. lender. The report claims that on 10th February, 2021, Binance mixed $20 million from a corporate account with $15 million from an account that received customer money. Binance spokesperson Brad Jaffe denied the allegations, stating that the Silvergate Bank accounts were not used to accept user deposits and were only used to facilitate user purchases of crypto. He further claimed that there was no commingling of funds since the accounts were 100% corporate funds.
The U.S. Commodity Futures Trading Commission (CFTC) sued Binance in March for allegedly operating an “illegal” exchange and a “sham” compliance program. The CFTC’s complaint also accused certain Binance entities of commingling funds. Binance did not comment on the Reuters report but referred to Hillmann’s tweets.
Hillmann took to Twitter to clarify Binance’s position, stating that the company keeps user and corporate funds on separate ledgers. However, he did not explicitly deny that the company commingles customer funds. The dispute highlights the ongoing regulatory scrutiny faced by Binance and other cryptocurrency exchanges.