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Binance Moved Billions Through Two U.S. Banks, Regulators Say

According to the filing, Signature’s Binance account reportedly received $1 billion in deposits and $1.3 billion in withdrawals in the same month. The outflow was sent to Merritt Peak, a company run by Mr. Cho, and the SEC alleges that client funds were secretly commingled.

Louise Shelley, a professor of money laundering at George Mason University, said: “This is one of the largest cases of financial fraud I have ever seen, and the evidence is enormous. ‘, adding that he was ‘surprised’ that both banks had taken such an action. It has been moving billions of dollars offshore for Binance for a very long time.

“This is a very big deal and should be a red flag.”

The regulator did not say whether Silvergate or Signature reported activity on Binance accounts. Silvergate voluntarily liquidated in early March after suffering billions of dollars in losses from cryptocurrency customers, but closed some Binance accounts in 2021 and 2022.

With both Silvergate and Signature, customers who have invested in digital currencies can quickly transfer funds in US dollars around the world at any time. While many banks in the U.S. refused to do business with cryptocurrency exchanges, Silvergate and Signature quickly developed niche businesses to serve that market.

Both banks were among the banks that failed this year as customers withdrew deposits from lenders amid a panic over the stability of smaller banks. California-based Silvergate closed briefly during the mini-banking crisis in March. Signature — the much bigger of the two banks — eventually Taken over The Federal Deposit Insurance Corporation and the New York State Department of Financial Services announced on March 12.

New York-based Signature at one point had 40 branches in the U.S. and nearly $100 billion in assets when it was taken over by regulators. In 2018, New York regulators Approved your request by Signature will begin accepting deposits from cryptocurrency trading customers through its specialized digital payment platform, the Signet platform.

and April report on Signature collapse, New York’s banking regulator said that financiers in the region are “identified as cryptocurrency banks,” but that’s kind of a mistake. “As of March 2023, cryptocurrency businesses accounted for 18% of the bank’s deposit base,” the regulator said, adding that the failure was a classic bank run by uninsured depositors.

The report does not mention deals with companies like Signature and Binance.

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