Exclusive: Crypto giant Binance controlled ‘independent’ U.S. affiliate’s bank accounts

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Exclusive: A senior Binance executive was the main operator for five bank accounts belonging to the giant cryptocurrency exchange’s purportedly independent US affiliate, including an account that held American customers’ funds

U.S. lender Silvergate Bank authorized the executive, Guangying Chen, a close associate of Binance CEO Changpeng Zhao, to operate the accounts in 2019 and 2020, according to records from those years. This allowed Chen and her deputies to move funds held in the bank accounts. Employees at the affiliate, Binance.US, had to ask Chen’s team to process payments, even to cover the firm’s payroll, company messages show.

In response to questions for this article, however, a Binance.US spokesperson, Christian Hertenstein, said that since the company’s current chief executive, Brian Shroder, took over in late 2021, “no one other than Binance.US officials have had control or access to Binance.US accounts.” Hertenstein did not explain the discrepancy in the time periods given by him and Juvvadi.

The U.S. Commodity Futures Trading Commission in March charged Binance and Zhao with willful evasion of commodities laws by “intentionally structuring entities” to avoid U.S. regulations designed to protect investors. Zhao called the civil charges an “incomplete recitation of facts.” The CFTC had no comment for this article.that a deputy of Chen’s had access to one Binance.US Silvergate account and that the account transferred more than $400 million in 2021 to a trading firm controlled by Zhao.

Chen then signed further agreements with Silvergate to act as the “Primary Admin User” for the five bank accounts: a customer deposit account; an account for corporate clients that later sent funds to Merit Peak; and three other accounts, according to bank records dated between December 2019 and January 2020. The agreements said the authorized person could withdraw funds from the accounts or deposit them, and designate others to do so, too.

After Chen gained authorization, her deputy, a Binance executive named Susan Li, took charge of managing the accounts’ transactions, including payments to cover Binance.US’s payroll, company messages show. “Approved from my end,” Li messaged a Binance.US employee after receiving one payroll request.

 

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