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Merit Peak, firm at heart of Reuters report, operated on Binance.US, exchange admits

source-logo  theblock.co 17 February 2023 01:33, UTC

Binance.US, the U.S. affiliate of the world’s largest crypto exchange, acknowledged that a market making firm called Merit Peak, which is alleged to have secretly received $400 million from the exchange, operated on its platform.

“While there was a market making firm named Merit Peak that operated on the Binance.US platform, it stopped all activity on the platform in 2021,” the company tweeted in response to a bombshell Reuters report earlier in the day that said the funds were withdrawn from the bank account of the exchange's U.S. affiliate during the first three months of 2021.

“Binance.US has never — and will never — trade nor lend out customer funds,” the statement adds.“Only Binance.US employees have access to Binance.US bank accounts. Period.”

The Reuters report said parent company Binance secretly transferred hundreds of millions in funds from a Binance.US account at California-based Silvergate Bank to Merit Peak, an investment firm also controlled by Binance CEO Changpeng Zhao.

Binance, which is not authorized to operate in the U.S., insists that Binance.US operates as a wholly independent affiliate.

“Our leadership team is staffed with former DOJ, SEC, FBI, and NYFed employees who are committed to operating a platform that is safe and abides by U.S. laws and regulations,” Binance.US said in its statement. The statement also claims that Binance.US fully reserves its assets, and is subject to “regular audits”.