The world’s largest crypto exchange Binance commingled billions in user funds with its revenue in 2020 and 2021, three sources familiar with the matter. The exchange earlier admitted to mistakenly mixing consumer funds with B-token reserves.
The commingling of funds happened almost daily in accounts held at US-based crypto-friendly bank Silvergate Bank. The sums of funds ran into billions of dollars, as per an insider with direct knowledge of Binance’s group finances.
Binance failed to comply with U.S. financial rules that require keeping customer money separate from the company’s accounts. There’s a lack of internal controls to differentiate customer funds from company revenues.
Reuters didn’t verify exact figures or frequency. However, it reviewed a bank record dated February 10, 2021, showing Binance mixed $20 million in corporate funds with $15 million from an account that received customer money.
John Reed Stark, a former chief of the Securities and Exchange Commission’s Office of Internet Enforcement, said “Binance customers shouldn’t need a forensic accountant to find where their money is.”
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