CZ denies holding firms received $12B of Binance.US user funds

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Binance CEO Chang­peng Zhao on June 8 coun­tered SEC claims and denied that one of his hold­ing firms received $12 bil­lion in U.S. cus­tomer funds.

Regard­ing the sup­posed $12 bil­lion trans­fer, Zhao said:

“This is sim­ply false … To the best of my knowl­edge, Binance.US had in total rough­ly $2 bil­lion in user funds.”

Zhao said that the val­ue of Binance.US’s user deposits could only have fluc­tu­at­ed slight­ly due to cryp­to prices and user with­drawals. He assert­ed that “all user funds are account­ed for, and nev­er left the Binance.US plat­form” unless users made withdrawals.

Zhao issued his state­ment in response to a Coin­desk arti­cle, which in turn cit­ed a court fil­ing as its source. He said he is “not sure if it’s the jour­nal­ist or the source” that ulti­mate­ly pro­vid­ed the sup­pos­ed­ly incor­rect information.

Coin­desk also obtained a state­ment from a Binance rep­re­sen­ta­tive who said that the funds ref­er­enced in the case are “strict­ly cor­po­rate funds and not user assets.”

How­ev­er, this appears to be a mis­un­der­stand­ing, not an admis­sion to fund trans­fers. The spokesper­son described “accounts” in the rel­e­vant SEC court fil­ing. This seem­ing­ly refers to Binance Hold­ings accounts that inci­den­tal­ly held $12 bil­lion from 2020 to 2022.

Court filings support $12B estimate

Oth­er parts of the SEC fil­ing nev­er­the­less appear to back the alle­ga­tion. One sec­tion says that Mer­it Peak — one of Zhao’s hold­ing com­pa­nies — received $11 bil­lion of user funds via Key Vision Devel­op­ment Lim­it­ed from 2019 to 2021.

The $12 bil­lion esti­mate appears to come from the fact that Mer­it Peak received an addi­tion­al $1.2 bil­lion from BAM Trad­ing, anoth­er Binance.US-related company.

Regard­less, the SEC says that Mer­it Peak comin­gled the rough­ly $12 bil­lion of funds with funds from oth­er sources, which in total amount­ed to $22 billion.

The SEC said:

“The SEC been unable to deter­mine why a Zhao-con­trolled enti­ty that was pur­port­ed­ly trad­ing on the Binance [sic] using Zhao’s per­son­al funds would have act­ed as a “pass through” account for bil­lions of dol­lars of Binance Plat­forms customers.”

The SEC’s court fil­ing cites a sep­a­rate doc­u­ment from its own accoun­tant, which pro­vides the same num­bers but does not iden­ti­fy the source of those funds as Binance.US cus­tomer funds.

The post CZ denies hold­ing firms received $12B of Binance.US user funds appeared first on Cryp­toSlate.

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