Reuters reports $400 million transfer from Silvergate accounts to Changpeng Zhao’s Merit Peak

Binance transferred more than $400 million from accounts opened by its U.S. subsidiary at Silvergate Bank to the trading firm Merit Peak, founded by the CEO of the bitcoin exchange Changpeng Zhao. The Reuters report, citing bank records and internal company correspondence, writes Reuters.

The operation was conducted from late 2020 through the end of the first quarter of 2021.

The agency noted that it could not specify its nature, nor whether funds belonging to U.S. clients were involved. Journalists noted concern among Binance.US executives, who did not know the reasons for such actions.

A spokesperson for the U.S. subsidiary told Reuters that the agency’s information was “outdated”.

Earlier Zhao indicated that one of the unnamed media outlets received from FTX $43 million for publication of a negative note about Binance.

In December 2022, Reuters reported that the U.S. Department of Justice is investigating possible violations of anti-money-laundering rules by the trading platform. CFTC is examining the exchange’s offer to American investors without proper product registration. Zhao reacted to the reports with the words: “Yeah, some media are still working for the …”.

Recently the exchange faced pressure over Binance USD (BUSD). The New York State Department of Financial Servicesordered Paxos, the company’s partner, to stop issuing the stablecoin. The SECalso stated that it was prepared to sue the latter.

The day before, Binance’s Chief Strategy Officer Patrick Hillmann said that the company was prepared to pay fines to settle the accusations in the United States.

The DOJ’s fraud division is investigating Silvergate’s deals with the cryptocurrency exchange FTX and the related hedge fund Alameda Research.

Senators Elizabeth Warren, John Kennedy, and Roger Marshall have asked Silvergate CEO Alan Lane to provide detailed information on the bank’s ties and the trading platform of Sam Bankman-Fried.

At the end of 2022, a class-action lawsuit was filed against the bank for its alleged role in transferring FTX users’ deposits to Alameda Research accounts.