According to Reuters, Guangying Chen, a top executive at Binance, controlled five bank accounts of the company’s independent U.S. subsidiary from 2019 to 2020. Bank records show that Silvergate Bank authorized Chen as the Primary Admin User of the accounts, including one that held American customers’ funds and an account for corporate clients. During this period, Binance.US staff sought approval from Chen’s team to process payments and cover payroll, as per company messages cited by Reuters.

Binance Denies Reports of Commingling User Funds

Binance has denied reports by Reuters that the company commingled user funds with corporate funds in 2020 and 2021, calling the report a “conspiracy theory.” The new report contradicts earlier claims made by Binance.US that it operates independently of Binance. Binance.US’s head of legal, Krishna Juvvadi, told Reuters in April that BAM Trading, the exchange’s operator, had exclusive control of the platform’s bank account since 2019. However, Reuters reported that the recent revelations have prompted a Binance.US spokesperson to confirm that the current CEO, Brian Shroder, has had complete control and access to the accounts since he took over in 2021.

Regulatory Scrutiny on Binance

Binance is facing increased scrutiny from various regulatory authorities in the United States over its compliance with local regulations. The Commodity Futures Trading Commission (CFTC) sued Binance and its CEO over commodities law violations, alleging that the exchange illegally facilitated trading derivative orders on commodities for U.S. citizens. The Department of Justice (DOJ) is also investigating the crypto exchange to determine whether Binance or its executives circumvented sanctions around Russia’s invasion of Ukraine. Binance has denied any wrongdoing and labeled the CFTC’s lawsuit as “unexpected and disappointing.” The exchange claims to comply with regulations and will continue to cooperate with regulators.

Binance Remains Silent on Request for Comment

As of press time, Binance and Binance.US have not responded to requests for comment from CryptoSlate on the matter. The new report further adds to the uncertainty surrounding Binance and its operations in the United States. The company’s regulatory troubles have led to a drop in trading volume and market share. It remains to be seen how Binance will address these issues and regain the trust of its users and regulatory authorities alike.

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