- Binance secretly moved $400 million from its US partner to a trading firm owned by boss Changpeng Zhao, according to Reuters.
- A US-based executive called the transfers "unexpected", saying that "no one mentioned them".
Binance secretly moved large sums of money from its supposedly independent US partner to a company managed by the crypto giant's boss Changpeng Zhao, according to Reuters.
The publication said Thursday that Binance's US partner started transferring money to Merit Peak in 2020 and sent the trading firm over $400 million in the first quarter of 2021, citing banking records and company messages.
Merit Peak is a market-maker trading firm owned by Binance CEO Zhao, who's often referred to by his initials CZ.
Binance claims that Merit Peak and Binance's US partner Binance.US operate independently from the global exchange, which CZ co-founded in 2017.
But Binance.US executives didn't know that it had been sending money to Merit Peak and were concerned when this came to light, according to company messages seen by Reuters.
Then-CEO Catherine Coley reportedly asked a Binance executive for an explanation in late 2020, calling the transfers "unexpected" and saying that "no one mentioned them".
The Securities and Exchange Commission has previously probed ties between Binance.US, Merit Peak, and another CZ-owned trading firm called Sigma Chain AG, according to a Wall Street Journal report published in February 2022.
Binance.US did not immediately respond to Insider's request to comment.
It's not clear why the money was sent from Binance.US to Merit Peak or if any of the funds belonged to US customers.
Reuters reported in November that FTX founder Sam Bankman-Fried had used at least $4 billion of customers' money to prop up Alameda Research, a supposedly independent trading firm that he managed.
FTX had already filed for bankruptcy when that story broke but Bankman-Fried was subsequently arrested in the Bahamas and extradited to the US to face eight counts of fraud.