Binance Accused of Complicity in Misplaced $1.8 Billion

A new investigation conducted by Forbes has raised significant questions about the management and custody of customer assets and the collateral of Binance stablecoin.

The world’s largest cryptocurrency exchange has been accused of complicity in misplaced $1.78 billion.

Forbes alleged that on Aug. 17, 2022, $1.78 billion worth of collateral used to back the crypto company’s stablecoin was moved out of Binance wallets. According to Forbes, a substantial part of the fund went to now-collapsed hedge fund Alameda Research, the trading arm of FTX.

Investors King understands that this is not the first time Binance will be in the midst of investigations. It would be recalled that the Justice Department began investigating Binance in 2018, exactly a year after the company started operations.

There were concerns that the exchange defied U.S. anti-money laundering and sanction laws. The agency has however not decided whether to press charges against the company or individual executives.

Meanwhile, some senators in the United States have started to challenge Binance on potentially illegal business practices after FTX’s collapse. The group of senators is pressing Binance, the world’s largest cryptocurrency exchange, for information on its finances following allegations of money laundering and sanction evasion.

The senators gave the CEOs of Binance and Binance.US until mid-March to respond to a list of demands for compliance standards and other practices. Leading the pack of Senator are Sens. Elizabeth Warren, D-Mass., Chris Van Hollen, D-Md., and Roger Marshall, R-Kan.

A letter the Senators wrote to Binance  CEO Changpeng Zhao and Binance.US CEO Brian Shroder partly read, “In the years since Binance’s founding, the company has faced increasingly disturbing allegations regarding the legality of its operations”.

The Senators also accused Zhao of refusing to disclose the location or entity of his exchange “in what many regards as a blatant attempt to dodge the world’s financial regulators, serve ‘users without licenses,’ and violate anti-money laundering laws.”