In a recent court filing, the U.S. Securities and Exchange Commission (SEC) raised allegations against Binance CEO Changpeng Zhao, claiming that Merit Peak, a holding company owned by Zhao, received billions of dollars in customer funds from Binance’s American exchange. However, Zhao vehemently denied these allegations and provided clarification to address the situation.

Denial of $12 Billion Transfer

Changpeng Zhao categorically refuted the claim of a $12 billion transfer, stating, “This is simply false… To the best of my knowledge, Binance.US had approximately $2 billion in user funds.” He acknowledged the possibility of slight fluctuations in the value of Binance.US user deposits due to cryptocurrency price changes and user withdrawals. However, he assured the public that “all user funds are accounted for and never left the Binance.US platform” unless withdrawn by the users themselves.

Rebuttal of Coindesk Article

Zhao’s response directly countered an article published by Coindesk, which cited the court filing as its source. He expressed uncertainty regarding whether the misinformation originated from the journalist or the source itself.

Clarification on Funds Mentioned in the Case

A representative from Binance clarified to Coindesk that the funds mentioned in the case were “strictly corporate funds and not user assets.” However, this statement appears to be a misunderstanding rather than an admission of fund transfers. The spokesperson referred to “accounts” mentioned in the SEC court filing, likely referring to Binance Holdings accounts that held $12 billion between 2020 and 2022.

Confusion and Allegations

Although certain parts of the SEC filing seem to support the allegations, particularly regarding Merit Peak, there are still elements of confusion. The filing states that Merit Peak received $11 billion of Binance.com user funds via Key Vision Development Limited from 2019 to 2021. Additionally, an estimated $1.2 billion was received by Merit Peak from BAM Trading, another Binance.US-related company, bringing the total to around $12 billion.

The SEC claims that Merit Peak commingled the approximately $12 billion with funds from other sources, resulting in a total of $22 billion. The SEC questions why an entity controlled by Zhao, which purportedly traded on Binance using Zhao’s personal funds, would serve as a pass-through account for billions of dollars of Binance Platforms customers.

Pending Legal Proceedings and the Need for Further Clarification

It is crucial to emphasize that the situation remains subject to ongoing legal proceedings. As the case progresses, it is likely that further clarification and evidence will emerge, shedding light on the allegations and the truth behind the fund transfers.

In conclusion, Binance CEO Changpeng Zhao has vehemently denied the allegations made by the SEC and provided clarification regarding the funds involved. The ongoing legal proceedings will hopefully bring forth more evidence and clarity to ascertain the veracity of the claims made against Merit Peak and its connection to Binance.US user funds.