Cryptocurrency

U.S. Congress may hold inquiry into Binance.US

According to a senator statement quoted by Reuters, the US Congress should conduct an investigation into Binance.US regarding its relationship with Merit Peak. February 17th.

Senator Roger Marshall told the publication:

“Something fishy is going on here that clearly doesn’t pass the smell test… Congress needs answers, and Binance.US and Silvergate are obliged to provide them to us.”

On February 16th, it was reported that Binance.US transferred $400 million from a Silvergate Bank account to Merit Peak in 2021. Merit Peak listed Binance CEO Changpeng Zhao as his manager, combined with the fact that Binance and Binance. The US is to operate separately and the relationship represents a potential conflict of interest.

Since that report, Binance.US has Profess On Twitter, Merit Peak, which operated on its platform, said, “We have ceased all activity. [Binance.US] in 2021”

Binance.US made a similar statement privately to Reuters yesterday, and expanded on that statement in a public tweet today. The company claimed that only Binance.US employees could access the company’s bank accounts. It also said that outside market makers like Merit Peak must compete fairly and transparently for rebates.

Binance.US further said it does not trade or lend customer funds. The company has distanced itself from a high-profile company collapse caused by a mix of funds. Perhaps alluding to the failure of FTX and Alameda Research.

Binance’s global division has dealt with a number of regulatory intrusions and actually expects to pay fines to U.S. regulators, one person said. February 15th Report from The Wall Street Journal. However, Binance.US has rarely come under such scrutiny, aside from previous and ongoing SEC investigations into the Merit Peak issue.

If today’s recommendation from Senator Marshall is taken up in Congress and becomes more than a private statement, Binance.US could soon face extensive scrutiny.

Marshall was previously involved in a congressional investigation into the relationship between FTX and Silvergate, as well as an anti-money laundering cryptocurrency bill.

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