Last Updated on May 24, 2023 by Bitfinsider

Binance responds to a Reuters special report from Tuesday, which alleged that the cryptocurrency exchange mixed customer funds with company revenue.

The report, citing unnamed “former insiders,” stated that the funds in question “totalled billions of dollars” and that “commingling occurred almost daily” in accounts held by the exchange at the defunct U.S. financial institution Silvergate Bank.

Additionally, Reuters found no evidence that client funds were “lost or stolen.” Reuters had previously reported that Binance was able to access and transfer Binance.US funds from a Silvergate account, a claim neither Binance nor Binance.US refuted.

“Commingling” or the mixing of customer and company funds has become a bit of a buzzword in the cryptocurrency industry since revelations following the collapse of exchange giant FTX in November 2017 sparked fears that the practice may be pervasive in the industry.

Binance itself has been accused of commingling funds after a January Bloomberg report disclosed the exchange kept collateral for certain crypto assets it issued in the same wallet as customer funds.

The fund flows described by Reuters in its Tuesday report “indicate a lack of internal controls to ensure customer funds were clearly identifiable and segregated from company revenues,” according to three former U.S. regulators quoted in the article, who also stated that the “commingling” obscured the location of customer funds.

Binance’s Chief Communications Officer Patrick Hillmann criticized the Reuters report, labeling it “weak” and full of “conspiracy theories.”

“Let me explain just how desperate a journalist @Reuters is to publish a negative story,” Hillmann said before commencing a five-paragraph Twitter tirade in response to the publication of the article, which did not directly refute the allegations made in the report.

Later, Hillmann wrote that the exchange addressed the issue “on multiple occasions.”
“We maintain wholly distinct ledgers for user and company funds” We know who their sources are, and @Reuters will be embarrassed when that information becomes public,” Hillmann tweeted in reference to the former insiders cited by the news outlet.

Hillmann also accused Reuters of “xenophobia” for mentioning Binance founder Changpeng Zhao’s ethnicity “without noting that he’s been a Canadian since the age of 12.”

Following the publication of this article, Hillmann tweeted that he had “very clearly refuted” Reuters’ claims, adding that the funds in issue “were Binance’s corporate funds” from the sale of BUSD stablecoins.