5th June 2023 – (New York) A senior executive at Binance, Guangying Chen, was the primary operator for five bank accounts belonging to the cryptocurrency exchange‘s purportedly independent U.S. affiliate, Binance.U.S., including an account that held American customers’ funds, according to bank records. Chen was authorised by US lender Silvergate Bank to operate the accounts in 2019 and 2020, allowing her team to move funds held in the bank accounts. Meanwhile, employees of Binance.U.S. had to ask Chen’s team to process payments, even to cover the firm’s payroll, messages show. Binance.U.S. has denied that Binance ever operated its bank accounts, but a Binance.U.S. spokesperson said that since late 2021, “no one other than Binance.U.S. officials have had control or access to Binance.U.S. accounts.”
The new findings offer further detail into how Binance exercised tight control over Binance.US, despite both firms maintaining that they have always operated independently. The previously unreported bank records and messages show that Binance’s management over the U.S. business’s finances extended across its bank accounts at Silvergate and detail how this secret access was granted. Binance and Silvergate did not respond to requests for comment.
The U.S. Commodity Futures Trading Commission charged Binance and CEO Changpeng Zhao with willful evasion of commodities laws by “intentionally structuring entities” to avoid US regulations designed to protect investors in March. Zhao called the civil charges an “incomplete recitation of facts.” The new revelations highlight how Zhao ensured he could direct the company’s expansion in the American crypto market while keeping it separate from his global exchange that was under scrutiny from US regulators.
Binance.U.S. ‘s operations in the U.S. are facing ever-closer attention in Washington, and by secretly retaining control over Binance.US’s finances, Zhao drew US regulators’ scrutiny away from the global exchange. Last year, Reuters reported that Zhao created Binance.US as a de-facto subsidiary to draw US regulators’ scrutiny away from the global exchange.
After Chen gained authorisation, her deputy, a Binance executive named Susan Li, took charge of managing the accounts’ transactions, including payments to cover Binance.U.S.’s payroll, company messages show. Chen retained control over the accounts until at least early 2021, the messages show.
Catherine Coley, the former CEO of Binance.U.S., repeatedly asked Li during 2020 for Binance to grant them control over Binance.U.S.’s own bank accounts, according to company messages. Coley and her team also expressed concern about how regulators would view the situation. Binance.U.S. did not answer questions about Chen’s role or when it may have ended.