Binance CEO Changpeng Zhao June 8 refuted the SEC’s allegations, denying the fact that one of his holding companies received $12 billion in U.S. client money.
Regarding the alleged $12 billion remittance, Zhao said:
“This is completely false…as far as I know, Binance.US held a total of around $2 billion in user funds.”
Zhao said the value of user deposits on Binance.US may have fluctuated only slightly due to cryptocurrency prices and user withdrawals. “All user funds are under our control and do not leave the Binance.US platform unless the user withdraws,” he claimed.
Zhao released a statement in response to a CoinDesk article, which cited court filings as sources. “I don’t know if it was the journalists or the sources,” he said, who ultimately provided the supposedly inaccurate information.
CoinDesk also obtained a statement from a Binance representative that the funds referred to in the incident were “strictly corporate funds and not user assets.”
However, this is a misunderstanding and does not seem to approve the transfer of funds. A spokesperson explained the “account” as follows: Relevant SEC Court Submissions. This appears to point to a Binance Holdings account that happened to hold $12 billion between 2020 and 2022.
Court filings support $12 billion estimate
Nonetheless, other parts of the SEC filing appear to support this claim. One section states that Merit Peak, one of Zhao’s holding companies, received $11 billion in user funds from Binance.com through Key Vision Development Limited from 2019 to 2021.
The $12 billion estimate appears to be based on the fact that Merit Peak received an additional $1.2 billion from another Binance.US affiliate, BAM Trading.
Nonetheless, the SEC says Merit Peak combined approximately $12 billion in funds with funds from other sources, totaling $22 billion.
The SEC said:
“The SEC was unable to determine why a Zhao-controlled entity was allegedly trading on Binance. [sic] Had Zhao’s personal funds been used, it would have acted as a “pass-through” account for billions of dollars of Binance platform customers. “
The SEC filing with the court states: another paper Information from the company’s own accountants, who provide the same figures, did not identify the source of those funds as Binance.US customer funds.
CZ Post denies that the holding company received $12 billion from Binance. US user funds first appeared on CryptoSlate.
