Key Points
- Binance transferred approximately $70 billion via accounts at Signature Bank and Silvergate Bank.
- The funds were distributed to a few foreign entities of Binance and also to the personal account of Changpeng Zhao, the company’s CEO.
- After this news, stock prices of Signature Bank and Silvergate Bank took a significant hit.
In a recent SEC filing, it was revealed that Binance has shifted a staggering $70 billion via accounts at two prominent banks – Signature Bank and Silvergate Bank.
A closer look at the SEC filing reveals that a portion of the funds found their way into foreign establishments associated with Binance. However, the report also highlights how the rest of the funds ended up in the personal account of Binance’s CEO, Changpeng Zhao, further fanning the flames of controversy surrounding Binance.
The Binance Controversy
Binance, a leading cryptocurrency exchange, has reportedly transferred around $70 billion through accounts at Signature Bank and Silvergate Bank, two of the biggest providers of banking services to the cryptocurrency industry.
It is important to note, that towards the end of 2022, Signature Bank cut its business ties with Binance due to concerns associated with the volatile cryptocurrency market. According to a recent SEC filing, some of the funds that were previously held by Signature Bank were moved out to foreign entities of Binance, while some ended up in the personal account of the exchange’s CEO, Changpeng Zhao.
This afternoon, the SEC filed a motion seeking a TRO and preliminary injunction against https://t.co/AZwoBOgsqS attempting to, amongst other things, freeze https://t.co/AZwoBOgsqS corporate assets. User assets remain safe and secure and the platform continues to be fully…
— Binance.US 🇺🇸 (@BinanceUS) June 6, 2023
This news comes after Silvergate Bank faced a bank run in the aftermath of the FTX bankruptcy, which resulted in a significant drop (68%) in deposits from cryptocurrency-related firms held by the bank.
Significance of This Exposed Money Trail
The cryptocurrency realm is currently experiencing a surge in scrutiny and increased attention to the operations of cryptocurrency exchanges. Authorities are increasing their efforts, taking action against exchanges that fail to adhere to regulations concerning anti-money laundering and other crucial statutes.
The exposure of the recent money trail is expected to intensify the push towards tighter regulation of the cryptocurrency industry and its links with traditional financial institutions.The impact of this revelation has already rippled through the stock market, causing shares of Signature Bank and Silvergate Bank to plummet.
Signature Bank, which is well-known for its cryptocurrency affinity, has experienced a particularly profound drop by a staggering 12% to a low of $90.76 on Thursday. These are just some of the aftershocks arising from this revelation, which could lead to a significant shift in the way the cryptocurrency industry operates.
The SEC Vs Binance Tussle
On June 5th, 2023, the world’s largest cryptocurrency exchange Binance and its CEO Changpeng Zhao were hit with over a dozen charges by the SEC. The agency accused them of violating U.S. law, citing a “blatant disregard” for regulations. In a blog post, Binance denied all allegations and even went on to refute the claim that customer assets were at risk.
Despite being disheartened by the SEC’s decision to take the case to court instead of continuing discussions about a settlement, the company vowed to defend their platform vigorously.
End Note
The revelation of Binance’s money trail runs through Signature Bank and Silvergate Bank has sparked questions about the regulatory landscape of cryptocurrency exchanges and the responsibility of banks in enabling these transactions. This revelation exposes Binance’s utilization of its bank accounts to swiftly move customer funds, highlighting the need for enhanced transparency and regulation in the cryptocurrency industry. The consequences of this news have reverberated across the stock market, with both Silvergate Bank and Signature Bank experiencing a decline in their share values.
