In an investigative piece from Reuters, allegations have been brought against Binance, the most prominent digital currency platform globally, for allegedly mixing up its clients' assets amounting to billions of dollars in 2020 and 2021. These allegations are based on accounts provided by three undisclosed individuals.
Among these unnamed individuals, one claims to possess inside information about Binance's financial dealings. This informant detailed that Binance frequently mixed billions in client funds using the services of Silvergate Bank, which is now non-operational.
It's worth noting that this is not the first time accusations have been leveled against Binance through reports published by Reuters. Previously, it had been accused of indulging in money laundering and suspicious money transfers. Consistent with its previous reactions, Binance remains staunch in rejecting the allegations.
In the special report, Reuters said the following:
"Company revenues entered the Silvergate account of the exchange's Cayman Islands holding firm, Binance Holdings, according to the sources and bank records. Customer dollars flowed into the Silvergate account of a firm in the Seychelles called Key Vision Development that was controlled by Binance CEO Changpeng Zhao.
One of the sources and a fourth person with direct knowledge of this account said Binance told Silvergate the Key Vision account's purpose was to receive dollar deposits from non-U.S. customers. Jaffe, the Binance spokesperson, said this was inaccurate without providing further details."
According to the investigative piece, Binance USD (BUSD), the exchange's stablecoin, is in the eye of the storm. The report suggests that customers' accounts were allegedly credited with BUSD when depositing US dollars.
The report quotes three past regulators from the US, highlighting the potential risk for customers, as they lack clarity about the true location of their assets, thereby jeopardizing their investments.
In an interview, John Reed Stark, the former chief of the SEC enforcement team, stated that Binance users should not be expected to hire expert financial investigators to track down their investments.