An investigative inquiry into Binance’s bank records showed that there were transfers of more than $400 million from Binance.US to Merit Peak, a company related to Changpeng CZ Zhao.
Summary
Binance involved in a transfer of more than $400 million to a company run by CZ
Yesterday, Reuters, shared an investigative report showing the most popular crypto-exchange Binance being involved in the transfer of over $400 million to a trading company linked to its CEO, Changpeng CZ Zhao.
Indeed, the investigation into Binance’s bank records and company messages showed that this was allegedly a series of transactions that took place in 2021, and originated from a Binance.US account.Â
Specifically, in the first three months of 2021, more than $400 million flowed from the Binance.US account at California-based Silvergate Bank to this trading company, Merit Peak Ltd. The Binance.US account was registered in the name of BAM Trading, the operating company of the crypto exchange in the US.
The trading company receiving this sum would be Merit Peak, which is supposed to be managed by or related to the CEO of crypto-exchange.
Not only that, the US Securities and Exchange Commission (SEC) reportedly launched an investigation as early as last February 2022 into the potential connections between Binance.US and Merit Peak.
Binance and the investigative inquiry: who is Merit Peak?
Continuing with the investigative report, a spokeswoman for Binance.US, Kimberly Soward, reportedly stated that Merit Peak is not a trading company and also does not provide any kind of service to Binance.US.
Not only that, Reuters had access to Binance’s corporate messages showing that such transfers had begun as early as late 2020.
And indeed, at that time, the one who was the CEO of Binance.US, Catherine Coley had written to a financial executive at Binance already asking for an explanation of the transfers describing them as unexpected and claiming that no one had ever mentioned them.
The response came from the crypto-exchange executive Susan Li, though she did not give any explanation on the matter.Â
The only thing of interest in this case is that Li would describe Merit Peak as a vendor who facilitated trading on Binance.US and also provided loans and capital contributions to the US crypto exchange.
Reuters was unable to trace the fate of the entire $400 million, although it later emerged that an unspecified portion of that money was later sent to the Silvergate account of an incorporated company in the Seychelles called Key Vision Development Limited.
The connection to CZ arrives just now, revealing through a 2021 corporate filing of another Binance unit that its CEO is also the director of Key Vision.
Commitment to rescue struggling crypto companies
At the start of 2023, Binance.US made headlines with its intention to acquire the struggling crypto company Voyager Digital.
It was a move that had unveiled the US crypto exchange’s plan to focus on risk management and save cryptocurrency firms devastated by the long “crypto winter.”
And indeed, CZ had stated that 150 companies had applied to be helped by Binance’s bailout fund, but until this year there had been no dedicated initiatives.
The only thing that might come close is the establishment of the crypto-exchange 7 wallet containing 1 billion BUSD, although the crypto-exchange has not confirmed the true purpose of the project.
