Claims That Compare Binance Us to Fraudulent Cryptocurrency Exchanges Are Refuted

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Last Updated on February 20, 2023 by Bitfinsider

Reports that Binance US, a cryptocurrency trading platform situated in the United States and connected to the international crypto exchange Binance, is similar to fraudulent and insolvent crypto exchanges have been debunked. Both Binance and Binance US assert that they are independent legal persons with distinct management structures.

The official Twitter account for Binance US wrote on Thursday, “There have been many attempts to draw parallels between Binance.US and fraudulent exchanges that have gone bankrupt.” The exchange continued, “There is no comparison,” and then gave some examples to back up its assertions.

First, Binance US clarified that its leadership is made up of former workers from the Federal Reserve Bank of New York, the Securities and Exchange Commission, the Federal Bureau of Investigation, and the U.S. Department of Justice (DOJ). The conversation described: “Our leadership team is staffed with former DOJ, SEC, FBI, and NY Fed employees who are committed to operating a platform that is safe and abides by U.S. laws and regulations.”

Next, Binance US addressed the claim that Binance has “secret access to a bank account belonging to its purportedly independent U.S. partner,” which was originally reported by Reuters. The article further claimed that during the first quarter of 2021, more than $400 million transferred from the Binance US bank account to Merit Peak Ltd., a trading business run by Binance CEO Changpeng Zhao (CZ).

Binance US announced: “While there was a market-making firm named Merit Peak that operated on the Binance.US platform, it stopped all activity on the platform in 2021,” and further clarified: “We list our competitive and transparent market maker program on our website, which shows that firms fairly compete for rebates.” They concluded saying: “Only Binance US employees have access to Binance US bank accounts. Period.”

Also, Binance US gave the crypto community the reassurance that it does not use customer assets, a matter that has come under intense scrutiny in the wake of the failure of FTX, the exchange that was accused of mixing user funds. Binance US stressed: “Binance US has never — and will never — trade nor lend out customer funds. Binance US always maintains 1:1 reserves and is subject to regular audits and regulatory reporting by government entities.”

The SEC has initiated action against a number of companies in the cryptocurrency industry, including Terraform Labs for scamming investors, Paxos for issuing the stablecoin Binance USD (BUSD), and Kraken for its staking program. Gary Gensler, the chairman of the SEC, suggested last week that all crypto assets be included in the federal custody regulations.

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