- Binance’s Chief Communications Officer, Patrick Hillmann, refutes a recent Reuters report alleging the crypto exchange mixed customer and company funds.
- Despite the allegations, Hillmann maintains that Binance keeps user and corporate funds on entirely separate ledgers.
Binance Refutes Reuters’ Claims of Commingling Funds
Patrick Hillmann, the Chief Communications Officer at Binance, strongly contests a recent Reuters report suggesting the cryptocurrency exchange has blended customer and corporate funds. The report cited unnamed “former insiders” who claimed the commingling of funds “ran into billions of dollars” and occurred nearly daily in accounts held at the now-defunct US lender, Silvergate Bank. However, Reuters found no evidence of clients’ funds being “lost or taken.”
The term “commingling”, referring to the blending of customer and company funds, has stirred unease in the crypto community following revelations from the collapse of the exchange giant FTX in November last year. This incident raised concerns about the potential industry-wide prevalence of the practice.
Allegations and Responses
Binance faced similar accusations earlier this year when a Bloomberg report unveiled that the exchange had inadvertently stored collateral for certain crypto assets it issued in the same wallet as customer funds. Such revelations, as described in Reuters’ report,
“indicate a lack of internal controls to ensure customer funds were clearly identifiable and segregated from company revenues,”
according to three former US regulators mentioned in the article.
Countering the allegations, Hillmann dismissed the Reuters report as “weak” and riddled with “conspiracy theories.” He accused Reuters of publishing a negative story out of desperation and launched into a multi-tweet response, though he did not outright deny the report’s claims.
Hillmann insisted that Binance had addressed these issues “on multiple occasions,” affirming that user and corporate funds are kept on entirely separate ledgers. He even suggested that Reuters would be embarrassed once the identity of their sources becomes public.
Further Controversy and Clarifications
In a further response to the Reuters article, Hillmann accused the publication of “xenophobia” for highlighting the ethnicity of Binance founder Changpeng Zhao without acknowledging that he has been Canadian since he was 12 years old.
After this article’s publication, Hillmann further clarified his stance, tweeting that he
“very clearly refuted”
Reuters’ claims. He added that the funds in question were Binance’s corporate funds generated from the sale of BUSD stablecoins.