Binance, one of the world's largest cryptocurrency exchanges, has reportedly transferred significant amounts of funds from its US partner to a trading firm managed by its CEO Changpeng Zhao. According to Reuters, the transfers from Binance's US partner to the trading firm Merit Peak began in 2020 and totaled over $400 million in the first quarter of 2021, as revealed by banking records and company messages.
Merit Peak is a market-making trading firm owned by Zhao, who is commonly referred to as CZ. The transfer of funds from Binance's US partner to Merit Peak raises concerns about the independence of Binance's US operations and its compliance practices, particularly with regards to its regulatory obligations.
Although Binance has claimed that Merit Peak and Binance.US operate independently from the global exchange, the unexplained transfer of such large sums of money has sparked questions about the transparency and accountability of Binance's operations. It remains to be seen whether any of the transferred funds belonged to US customers and whether any regulatory action will be taken against Binance.
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