In a swift response to a recent Reuters special report, Binance, the popular cryptocurrency exchange, has vehemently denied allegations that it commingled customer funds with company revenue.
The report, based on information provided by unnamed “former insiders,” suggested that the exchange had mixed funds amounting to billions of dollars on a near-daily basis in accounts held at Silvergate Bank, a collapsed U.S. lender.
However, Reuters did not find evidence to support the claim that clients’ funds were lost or misappropriated.
The practice of “commingling,” which involves the intermingling of customer and company funds, has been a source of concern within the crypto industry since the downfall of FTX, a major exchange, last year. Following those revelations, fears have arisen that this practice may be widespread across the industry.
Binance has previously faced similar allegations when a Bloomberg report in January revealed that the exchange had mistakenly stored collateral for certain crypto assets together with customer funds in the same wallet.
Such fund flows, as described by Reuters, indicate a lack of internal controls to ensure clear segregation of customer funds from company revenues. Three former U.S. regulators cited in the article claimed that this “commingling” obscured the traceability of customer funds.
Patrick Hillmann, Chief Communications Officer of Binance, took to Twitter to dismiss the Reuters report, describing it as “weak” and filled with “conspiracy theories.”
While Hillmann did not outright deny the allegations, he criticized the journalist and accused Reuters of being desperate to publish a negative story. He emphasized that Binance maintains separate ledgers for user and corporate funds, refuting any claims of commingling.
Despite Hillmann’s strong response, the exchange did not provide a detailed rebuttal to the specific allegations made in the report. Instead, Hillmann referred to Binance’s previous statements on the issue and hinted that the identities of Reuters’ sources would be revealed publicly, embarrassing the news outlet.
While Binance stands firm in denying the commingling claims, the incident highlights the need for stronger internal controls within the crypto industry to ensure the clear separation of customer funds and company revenues.
