Binance.US sent around $404 million to a company run by Binance CEO Changpeng Zhao, according to a February 16 Reuters report.
This report alleges that Binance.US, trading as BAM Trading, sent millions of dollars from a Silvergate Bank account to a trading company called Merit Peak Ltd.
Merit Peak Appoints Changpeng Zhao, CEO of Binance, as its Director. Binance and Binance.US had to operate separately since 2019. As such, the above transactions imply that Zhao has a possibly inappropriate financial connection to Binance.US.
Reuters went so far as to suggest that the transactions involve Binance controlling the finances of Binance.US. He also said that Merit Peak was a reseller on Binance.US and, citing regulators, said the lack of public disclosure on the matter created a conflict of interest. Reuters, however, was unable to find the reason for the transfers and was unable to determine whether the transferred funds belonged to exchange clients.
The transfers took place at the end of 2020 and in the first quarter of 2021. Around this time, Catherine Coley, who was previously CEO of Binance.US, suddenly left the company and died on social media. Reuters said today that Coley noticed the unusual transactions and asked other Binance.US staff about it before leaving the company.
Reuters obtained its information from bank statements and private messages from Binance.US. Binance.US did not comment on the transactions but told Reuters it had accessed “outdated information”. Binance.US told Reuters that Merit Peak does not use its trading services. Reuters said Merit Peak ceased operations on an unknown date.
The connection between Binance.US and Merit Peak has attracted attention since February 2022, when it was reported that the US SEC was investigating the exchange’s various partners. This report indicates that the SEC assigned Binance.US for the first time in 2020.