A Binance.US employee messaged colleagues in May 2020 to say Silvergate "was still waiting for Heina to sign the final paperwork" on a new bank account for the Binance.US exchange's institutional customers. The Silvergate documents she signed listed her address as in Shanghai. "Approved from my end," Li messaged a Binance.US employee after receiving one payroll request.Ĭhen, known as Heina, retained control over the accounts until at least early 2021, the messages show. Hertenstein, the Binance.US spokesperson, told Reuters that "since at least 2021, the only 'Primary Admins' on active Binance.US accounts have been Binance.US officials." He said some of the accounts identified by Reuters as being operated by Chen were "institutional client accounts," without elaborating on their activity.Īfter Chen gained authorization, her deputy, a Binance executive named Susan Li, took charge of managing the accounts' transactions, including payments to cover Binance.US's payroll, company messages show. "We cannot change anything" in the Silvergate banking portal, she wrote. The arrangement left Binance.US's chief lacking ultimate control over the company's own finances.
The agreements said the authorized person could withdraw funds from the accounts or deposit them, and designate others to do so, too.Ĭoley told colleagues in a message later that year that she and her finance team were not administrators for BAM's accounts and only had view-access. A lawyer representing her, James McDonald, didn't respond to requests for comment.Ĭhen then signed further agreements with Silvergate to act as the "Primary Admin User" for the five bank accounts: a customer deposit account an account for corporate clients that later sent funds to Merit Peak and three other accounts, according to bank records dated between December 2019 and January 2020. A person familiar with the document said Coley signed it.Ĭoley left Binance.US in 2021. The resolution document, reviewed by Reuters and authored by a Silvergate relationship manager, requested that Coley authorize Chen to "open accounts, transact, and otherwise operate" accounts on behalf of BAM Trading. In December 2019, a Binance.US employee told Coley that Silvergate wanted her to sign a banking resolution, a document that defines a firm's banking relationship, to "make sure it is ok" for Chen to manage Binance.US's bank accounts, according to messages exchanged between Binance.US employees. regulators' scrutiny away from the global exchange. Reuters reported last year that, in fact, Zhao created Binance.US as a de-facto subsidiary to draw U.S. But Binance.US said it operated solely as a "US partner" of Binance. Zhao owned BAM Trading through layers of offshore companies, company documents show. The Binance.US trading platform was launched by its operating firm, BAM Trading, in mid-2019 under chief executive Catherine Coley. Binance denied mixing customer deposits and company funds, saying that users who sent money to the account were not making deposits but rather buying Binance's bespoke dollar-linked crypto token. financial rules that require client money to be kept separate. Reuters also reported on May 23 that Binance commingled its customers' funds with its corporate revenues in Merit Peak's Silvergate account, in breach of U.S. Juvvadi said an investigation Binance.US conducted into Reuters' previous findings found they were "simply not true."
Binance.US has said the trading firm, Merit Peak, was withdrawing its own funds, money that derived from its trading activity on the exchange. Reuters has previously reported that a deputy of Chen's had access to one Binance.US Silvergate account and that the account transferred more than $400 million in 2021 to a trading firm controlled by Zhao. Zhao called the civil charges an "incomplete recitation of facts." The CFTC had no comment for this article. regulations designed to protect investors. Commodity Futures Trading Commission in March charged Binance and Zhao with willful evasion of commodities laws by "intentionally structuring entities" to avoid U.S.
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