Kevin Helms
A student of Austrian economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the intersection of economics and cryptography.
Binance US Rebuts Reports Comparing It To Fake Crypto Exchanges – Exchange Bitcoin News
Binance US has refuted reports drawing parallels between it and “fraudulent exchanges that have gone bankrupt.” The US-based crypto trading platform stressed that “only Binance.US employees” have access to its bank accounts, denying the claim that global crypto exchange Binance has “secret access”.
Clarifications from Binance US
Binance US, a US-based cryptocurrency trading platform affiliated with global crypto exchange Binance, has refuted reports comparing it to fraudulent and bankrupt crypto exchanges. Binance and Binance US maintain that they are separate entities with different management teams.
“There have been many attempts to draw parallels between Binance.US and fraudulent exchanges that have gone bankrupt,” the official Twitter account of Binance US tweeted on Thursday. “There is no comparison,” the exchange stressed, going on to provide some evidence to support the claims.
First, Binance US explained that its management consists of former employees of the US Department of Justice (DOJ), the Securities and Exchange Commission (SEC), the Federal Bureau of Investigation (FBI), and the Federal Reserve Bank of New York (NY Fed). The exchange in detail:
Our management team is staffed with former DOJ, SEC, FBI and NY Fed employees who are committed to operating a platform that is safe and compliant with US laws and regulations.
Binance US then addressed the allegation, first published by Reuters, that Binance had “secret access to a bank account belonging to its allegedly independent US partner.” The publication further claimed that in the first three months of 2021, more than $400 million flowed from the bank account of Binance US to Merit Peak Ltd., a trading firm managed by Binance CEO Changpeng Zhao (CZ).
“While there was a market-making firm named Merit Peak operating on the Binance.US platform, it stopped all activity on the platform in 2021,” Binance US claimed. “We list our competitive and transparent market maker program on our website, which shows that firms compete fairly for discounts.” The exchange insisted:
Only Binance US employees have access to Binance US bank accounts. Period.
In addition, Binance US assured the crypto community that it does not use client funds, a topic that is being heavily scrutinized following the collapse of FTX, the exchange that allegedly commingled client funds. Binance US emphasized:
Binance US has never – and never will – trade or lend customer funds. Binance US always maintains 1:1 reserves and is subject to regular audits and regulatory reporting by public entities.
The SEC recently took action against several firms in the crypto sector, including Kraken over its staking program, Paxos over the issuance of stablecoin Binance USD (BUSD) and Terraform Labs for defrauding investors. Last week, SEC Chairman Gary Gensler proposed changing federal custody rules to cover all crypto assets.
What do you think of the clarifications from Binance US? Let us know in the comments section below.
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