Binance Continues Using Suspected Ethereum Account for Commingling Funds
Binance, a prominent cryptocurrency exchange, continues to employ the Ethereum account that has been accused of intermixing clients’ funds. Binance faced charges from the Securities and Exchange Commission (SEC) earlier this month, alleging that the exchange had combined funds into accounts held by entities which were under the control of Changpeng Zhao (commonly known as CZ), namely Sigma Chain and Merit Peak.
The existence of this account was initially brought to public attention by journalist Mike Burgersburg, known on Twitter as “Dirty Bubble Media.”On Tuesday, the account received about $7 million in Tether and 299,999 Uniswap tokens worth approximately $1.3 million from two different accounts on Binance.com. Interestingly, a few hours later, all of these funds were transferred to Binance US accounts.
🚨BOOM! THE SEC CONFIRMS OUR REPORTING BINANCE US CUSTOMER ASSETS WERE COMMINGLED IN MAIN BINANCE EXCHANGE WALLETS… 🧵👇🔥 https://t.co/wpg5KjkAyw pic.twitter.com/bkm41fReYe
— DIRTY BUBBLE MEDIA: GOOD LUCK, GOOD BYE. (@MikeBurgersburg) June 7, 2023
Funds Worth Billions Transferred
The account is involved in transferring huge amounts of funds from Binance.com to Binance US ever since it was created in August last year. To date, there has been a transfer of around $1.4 billion. Binance has not provided a comprehensive explanation for these actions. However, during a Twitter Space event held following the crash of Sam Bankman-Fried’s FTX in November of the previous year, Changpeng Zhao (CZ) admitted being a shareholder in a market maker that serves Binance. CZ claimed that this market maker does not generate profits.
In the same interview, CZ asserted that Binance is a transparent and straightforward exchange that does not engage in trading against its own clients. Nonetheless, the SEC charged CZ for utilizing up to 300 personal accounts to trade on the Binance platform.
