- Reportedly, Binance moved $400 million from a US partner to a company with which CZ was involved.
- The transfers to Merit Peak began in late 2020.
- Binance.US management was concerned about the outflows.
Reuters has reported that according to banking records and internal company messages, Binance had unauthorized access to a bank account that belonged to its ostensibly independent U.S. partner. This access allowed Binance to move significant sums of money from the partner’s account to a trading firm controlled by Binance CEO Changpeng Zhao aka CZ.
According to records for the quarter obtained by Reuters, more than $400 million was transferred from an account belonging to Binance.US held at Silvergate Bank in California to a trading company known as Merit Peak Ltd. during the first three months of the year 2021.
The data shows that the Binance.US account was registered using BAM Trading, the operational firm for the United States exchange. According to the information sent out by the company, the transfers to Merit Peak began in late 2020.
At that time, the published terms of service for the exchange indicated that Silvergate and the custodian company Prime Trust LLC, located in Nevada, controlled the dollar deposits made by the exchange’s customers.
According to the documents obtained from the bank, Prime Trust wired a total of $650 million into the account held by Binance.US throughout the quarter.
Nonetheless, Kimberly Soward, a spokesperson for the United States government, said that Reuters’ reporting had “outdated information,” although she did not elaborate further.
According to emails seen by Reuters, Binance.US management was concerned about the outflows because the transactions were taking place without their knowledge. Catherine Coley, the CEO of Binance.US at the time, wrote to a financial officer of Binance in late 2020, requesting an explanation for the payments, which she called “unexpected” and claimed, “no one addressed them.”