Binance: The crypto exchange in a new controversy
Crypto company Binance seems to be constantly involved in controversies. If it’s not regulators suspecting it of fraud, it’s the press accusing it of misusing user funds.
Binance allegedly violates asset accounting management standards
Once again, the crypto exchange finds itself entangled in a financial controversy related to its activities. Not long ago, Forbes magazine revealed potential implications of Binance in dubious financial practices. Just as the company finished explaining itself, a new controversy emerges, this time from Reuters.
Indeed, on Tuesday, May 23, information about financial misconduct perpetrated by the firm surfaced. These actions would have been carried out to the detriment of users. Specifically, Binance is accused of lumping together its own funds and those of users in the same financial pool.
If verified, this practice is absolutely contrary to US financial and accounting rules. Every company is required to clearly distinguish between its own funds and those of its clients. This traceability measure fundamentally aims to protect users in case of any setbacks.
According to sources, these questionable operations were regularly conducted through accounts at Silvergate Bank. The amounts involved have not been disclosed but are said to be in the billions of dollars.
Binance responds and rejects the accusations
Naturally, Binance wasted no time in responding to the allegations of misconduct. The company denied everything outright. According to Binance, these accusations are baseless, although they acknowledge shortcomings in their financial processes “in the past.”
On Twitter, Binance’s Director of Communications, Patrick Hillmann, stated, “We’ve been very public about where the company had regulatory shortcomings in the past, there’s no reason for a respected news outlet like @Reuters to continue making stuff up.”
Furthermore, Binance stated that none of the funds in its Silvergate accounts were customer deposits. Therefore, they were only used to acquire BUSD stablecoins, in line with the information provided to users.
This story could further tarnish Binance’s reputation, which appears to be increasingly weakened in the US crypto landscape.
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Diplômé de Sciences Po Toulouse et titulaire d'une certification consultant blockchain délivrée par Alyra, j'ai rejoint l'aventure Cointribune en 2019. Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l'économie, j'ai pris l'engagement de sensibiliser et d'informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu'elle offre. Je m'efforce chaque jour de fournir une analyse objective de l'actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.