- Binance reportedly transferred over $400 million from its U.S. exchange to Merit Peak, a trading firm.
- Binance chief Changpeng Zhao is listed as the manager of Merit Peak.
- It is unclear at this time if the transferred funds were customer deposits.
- The crypto exchange has maintained that Binance U.S. is an independent entity.
The world’s largest crypto exchange reportedly transferred millions of dollars from its U.S based partner exchange to a private trading firm. According to a report by Reuters, Binance had access to a bank account belonging to Binance U.S. and over the course of several months, over $400 million was transferred to a trading firm called Merit Peak.
Binance U.S CEO did not approve the transfers
The documents viewed by Reuters painted a picture of the suspicious transfers that took place over the course of several months. These documents included communication from both Binance and its U.S. exchange. As per company messages, the transfers started in late 2020. In the first quarter of 2021, more than $400 million was transferred from Binance U.S’s account at Silvergate Bank to Merit Peak. Interestingly, Binance CEO Changpeng Zhao is listed as the manager of Merit Peak Ltd.
Company messages revealed that the executives at Binance U.S were concerned about these transfers, given that they had no knowledge of them. In late 2020, Binance U.S CEO Catherine Cole wrote to a Binance executive, seeking an explanation for the “unexpected” transfers that were not mentioned to the U.S-based crypto exchange.
While it is unclear at this time if the transferred funds were customer deposits belonging to the exchange’s users, bank records viewed by Reuters show a series of suspicious transfers. As per the public terms of Binance U.S, a portion of the customers’ dollar deposits were held at Prime Trust LLC at the time. This Nevada-based custodian firm wired $650 million to Binance U.S’ Silvergate account during that quarter.
A person with direct knowledge of the transfers revealed that a portion of the $400 million was sent to Key Vision Development Limited, a firm incorporated in Seychelles. As per a corporate filing in 2021, Binance CEO Changpeng Zhao was the director of Key Vision at the time.
When asked to comment on the findings, a Binance spokesperson described the information as “outdated.” The spokesperson claimed that “only Binance U.S employees have access” to the U.S exchange’s account, but bank records and company messages indicate otherwise. Binance has maintained that the U.S. exchange is an independent entity.