February 27, 2024

Binance Denies Allegations of Using $1.8B in Customer Funds

A representative of the largest crypto exchange Binance denied information from the Forbes article “ShuffleBinance’s assets are very similar to FTX’s maneuvers,” which states that the exchange handles $1.8 billion in client funds.

According to Forbes, between August 17 andDecember 2022 Binance transferred $1.8 billion deposited “as collateral intended to support its clients’ stablecoins” without explanation, leaving users with unsecured funds.

The publication claims that $1.1 billion ofUSDC stablecoins received from clients, issued by Circle, were sent to Chicago-based high-frequency trading firm Cumberland/DWR. This was done in order to “assist Binance toward collateralization of its own stablecoin, Binance USD (BUSD).”

In addition, Binance has transferred hundreds of millions of dollars worth of cryptocurrencies to crypto companies Amber Group, Sam Bankman-Fried's Alameda Research, and Justin Sun's Tron.

Journalists believe that Binance manipulated its clients' funds in the same way as FTX before filing for bankruptcy and, accordingly, carried out illegal transactions.

A Binance representative assured that the transactions described are part of internal billing processes and do not in any way affect the provision of user assets.

Later service managerBinance security Patrick Hillman stated that the movement of capital between wallets is absolutely legal and the exchange does not mix its assets with customer funds. He invited interested parties to check the veracity of their claims against public blockchain records.

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