The fourth item on the list was “Ignore FUD, fake news, attacks,” using an acronym for “fear, uncertainty and doubt” often used in crypto in relation to news perceived as negative. Zhao has not directly addressed the report, but on Friday he tweeted, “Remember 4.,” tagging a previous post in which he listed his “Do’s and Don’ts” for 2023. financial regulators since the collapse of major exchange FTX in November.
The activities of crypto platforms’ market makers - firms that typically buy and sell assets at exchanges to deepen trading volumes - have come under growing scrutiny from U.S. The global Binance exchange is not licensed to operate in the United States but the transfers to Merit Peak revealed by Reuters suggest that Binance controlled the finances of Binance.US, despite saying publicly that the American entity is “fully independent” and operates as its “US partner.”īinance transferred over $400 million from the account at California-based Silvergate Bank to Merit Peak between January and March 2021, Reuters reported on Thursday.īefore that story’s publication, Binance.US had told Reuters that “Merit Peak is neither trading nor providing any kind of services on the Binance.US platform,” without giving further details.īinance.US’s executives were concerned by the outflows from the Silvergate account to Merit Peak because the transfers were taking place without their knowledge, according to the messages reviewed by Reuters.Ī spokesperson for the global Binance exchange, which did not respond to Reuters’ questions for the article on Thursday, told crypto news outlet CoinDesk that the transfers were “a Binance.US issue.” Our leadership team is staffed with former DOJ, SEC, FBI, and NYFed employees who are… - Binance.US 🇺🇸 February 16, 2023 The real facts speak for themselves: there is no comparison. There have been many attempts to draw parallels between and fraudulent exchanges that have gone bankrupt. It did not elaborate on when in 2021 the activity ceased, or comment on Zhao’s role at the trading firm.Ī spokesperson for Binance.US referred CNN to its Thursday tweet, emphasizing the line that reads: “ONLY Binance.US employees have access to Binance.US bank accounts. “While there was a market making firm named Merit Peak that operated on the Binance.US platform, it stopped all activity on the platform in 2021,” Binance.US said in a tweet on Thursday after the Reuters story was published. Reuters reported on Thursday that Binance had secret access to a bank account belonging to its purportedly independent US partner and transferred large sums of money from the account to the trading firm, Merit Peak Ltd.
The US partner of global cryptocurrency exchange Binance has confirmed that a trading firm managed by Binance CEO Changpeng Zhao operated as a market maker on its platform.
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