Binance Moved $400M from U.S. Partner to Its CEO-Run Trading Firm, Reuters Says

Global cryptocurrency exchange Binance had secret access to a bank account belonging to its purportedly independent U.S. partner and transferred large sums of money from the account to a trading firm managed by Binance CEO Changpeng Zhao, banking records and company messages show, reported by Reuters.

Over the first three months of 2021, more than $400 million flowed from the Binance.US account at California-based Silvergate Bank to this trading firm, Merit Peak Ltd, according to records for the quarter, which were reviewed by Reuters. The Binance.US account was registered under the name of BAM Trading, the U.S. exchange's operating company, according to the records. Company messages show the transfers to Merit Peak began in late 2020.

Reuters couldn't determine the reason for the transfers or whether any of the money belonged to Binance.US customers. The exchange's public terms of use at the time said its customers' dollar deposits were held at Silvergate and a Nevada-based custodian firm called Prime Trust LLC. Prime Trust made $650 million in wire transfer deposits into the Binance.US account during the quarter, the bank records show.

A Binance.US spokesperson, Kimberly Soward, did not address Reuters' questions about the transfers detailed in the bank records. In a statement, she said Reuters' reporting used "outdated information" without elaborating further. She added: "Merit Peak is neither trading nor providing any kind of services on the Binance.US platform" and "only Binance.US employees have access" to the bank accounts of the U.S. company. Soward didn't specify when Merit Peak's activities ceased.

Reuters was unable to trace what became of the $400 million. An unspecified portion of the money was subsequently sent to the Silvergate account of a Seychelles-incorporated firm called Key Vision Development Limited, according to a person with direct knowledge of the transfers. A 2021 corporate filing by another Binance unit identified CEO Zhao as a director of Key Vision. A former Silvergate executive confirmed that Key Vision held an account at Silvergate at the time.

Key Vision's local registered agent did not respond to requests for comment.