Binance Responds to Reuters Claims About Mixing User Funds

A Reuters report on Tuesday indicated that Binance – the world’s largest cryptocurrency exchange – mixed billions of dollars in customer assets with the company’s revenue in 2020 and 2021, hiding the whereabouts of their funds.

Binance Chief Communications Officer Patrick Heilmann responded by calling the story “weak” and xenophobic, but admitted that Binance had “regulatory flaws” in the past.

Reuters claims

Reuters primary a report He cited several anonymous sources familiar with the matter, one of whom had “first-hand knowledge of Binance Group’s finances.”

The source claimed that mixing occurred “almost daily” in accounts Binance holds with Silvergate — a now-collapsed crypto-backing bank Investigation To help the bankrupt FTX exchange raise money with Alameda Research.

Binance told Reuters that none of the funds in its Silvergate accounts were “customer deposits,” but rather funds used to purchase BUSD, Binance’s native stablecoin pegged to the dollar.

However, throughout 2021, the exchange website represented dollar transfers to its platform as “deposits” that would be “credited” to their accounts as BUSD, creating potential confusion about regulatory safeguards around such transfers.

Paxos – the issuer behind BUSD – was forced to stop issuance The new token settled in February after Wells received notice from the US regulators.

Binance response

in tweet On Tuesday, Binance’s Heilmann confirmed that customers were explicitly told on the website that their “deposits” would be used to buy BUSD.

The communications officer also called out a qualified statement to Reuters that he found “no evidence” that Binance customers lost any funds, which he viewed as a “transparent attempt to protect themselves from a defamation lawsuit.”

“We have been very public about the company’s regulatory shortcomings in the past, and there is no reason for respected news outlets like Reuters, to continue to make things up,” he said.

Hillman went on to accuse Reuters of implicit “xenophobia” for repeatedly referring to CEO Changping Zhao’s ethnicity. have executive power explained In the past, Binance was not a Chinese company and he has been a Canadian citizen since he was 12 years old.