Changpeng Zhao, the CEO of Binance, has denied the claims made by the US Securities and Exchange Commission (SEC) that one of his holding companies received $12 billion in US customer funds. The allegations were made in a court filing by the SEC, which cited a transfer of funds from Binance.US to a holding company controlled by Zhao.

Binance CEO Responds

Zhao has refuted the claims made by the SEC, stating that they are “simply false.” He stated that Binance.US had a total of approximately $2 billion in user funds, and that the value of these funds could only have fluctuated slightly due to crypto prices and user withdrawals. Zhao also asserted that “all user funds are accounted for, and never left the Binance.US platform” unless users made withdrawals.

Zhao issued his statement in response to a Coindesk article, which had cited the court filing as its source. He expressed uncertainty as to whether it was the journalist or the source that had provided the incorrect information. A Binance representative also provided a statement to Coindesk, stating that the funds referenced in the case were “strictly corporate funds and not user assets.”

However, there appears to be a misunderstanding regarding the accounts mentioned in the SEC court filing. The spokesperson described “accounts” in the filing, which seemingly referred to Binance Holdings accounts that held $12 billion from 2020 to 2022. The $12 billion estimate appears to come from the fact that Merit Peak, one of Zhao’s holding companies, received an additional $1.2 billion from BAM Trading, another Binance.US-related company.

Despite this, the SEC maintains that Merit Peak comingled roughly $12 billion of funds with funds from other sources, totaling $22 billion. The SEC has been unable to determine why a Zhao-controlled entity that was purportedly trading on Binance using Zhao’s personal funds would have acted as a “pass through” account for billions of dollars of Binance Platform customers.

The SEC’s court filing cites a separate document from its own accountant, which confirms the same numbers but does not identify the source of those funds as Binance.US customer funds.

Binance CEO Changpeng Zhao has denied the SEC’s claims that one of his holding companies received $12 billion in US customer funds. While there appears to be a misunderstanding regarding the accounts mentioned in the SEC court filing, the SEC maintains that Merit Peak comingled roughly $12 billion of funds with funds from other sources, totaling $22 billion.

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