Business In News
- Binance has responded to a recent report from Reuters that accused the exchange of mismanaging customer funds.
- Reuters’ report alleged that the crypto exchange commingled customer funds between 2020 and 2021.
- The report accused Binance of breaching U.S. banking laws by mixing users’ funds with the company’s revenue.
- The exchange has discarded the report as the work of a “desperate journalist”.
The world’s largest crypto exchange has taken issue with a recent report put out by legacy media house Reuters. Binance has responded to a report from Reuters earlier today, which alleged that the crypto exchange mismanaged customers’ funds and commingled them with the company’s revenue.
Binance: Reuters Report Written By A Desperate Journalist
Citing a former insider at Binance, Reuters reported earlier today that between 2020 and 2021, the crypto exchange commingled customer funds with company revenue. A person with direct knowledge of the exchange’s finances told Reuters that the commingling occurred on a near-daily basis, with the sum running into billions of dollars. The mixing of funds happened in the accounts that the crypto exchange held at the United States-based Silvergate Bank.
While Reuters wasn’t able to independently verify the figures or the frequency of commingling revealed by the former insiders, it did review a bank record from February 2021, which showed that Binance mixed $20 million from a corporate account with $15 million from an account that received customer funds. Reuters accused the crypto exchange of breaching U.S. banking laws by commingling funds and failing to control internal controls to ensure customer funds were clearly identifiable and segregated from company revenues.
Patrick Hillmann, the Chief Communications Officer at Binance, responded to Reuters’ controversial article on Twitter. Hillmann brushed aside the report as the work of a “desperate journalist” trying to publish a negative story against the crypto exchange. He indicated that Reuters had framed the allegations in such a way that they would be protected from a libel suit. He further accused the media firm of peddling conspiracy theories without backing them up with evidence.
We’ve been very public about where the company had regulatory shortcomings in the past, there’s no reason for a respected news outlet like @Reuters to continue making stuff up.”
Patrick Hillmann, Chief Communications Officer, Binance
According to Hillmann, the report by Reuters was based on the fact that when users purchased BUSD (Paxos) from Binance, they were taken to a transaction page that had the term “deposit” on it. He clarified that users were purchasing a stablecoin that was redeemable by Paxos, which was explicitly stated on the website.