According to the SEC accountant, there were transactions within various Binance and Zhao-owned company accounts held at Silvergate Bank and Signature Bank. These exhibited a pattern of large incoming credits followed by outgoing debits within days. Consequently, these accounts consistently maintained lower balances at the beginning and end of each month.
As an illustration, one account at Silvergate Bank began with a balance of $7.6 million and ended with $7.7 million. However, in February 2022, a substantial deposit of $20 million was made. Subsequently,$17 million was wired to other Binance entities.
The motive behind these financial transfers remains unclear. However, it is worth noting that financial institutions in the United States are obligated to report suspicious activity. Despite the significance of these findings, Binance has yet to respond to requests for comment. This has left speculations as to the purpose of these money movements.
Binance’s Confrontation with the SEC
This revelation comes on the heels of the SEC’s lawsuit against Binance and CEO Changpeng Zhao. They were accused of willfully disregarding federal securities laws. The regulatory agency alleges that Binance and BAM Trading, operating as Binance.US, were unlawfully functioning as an exchange, broker-dealer, and clearing agency without proper registration.
Additionally, the SEC’s complaint includes the assertion that cryptocurrencies such as Solana, Cardano, and Polygon were categorized as securities.
Emergency Motion to Freeze Assets
In a bid to safeguard investor assets and prevent the dissipation of funds, the SEC has filed an emergency motion seeking to freeze the assets of Binance.US. The agency highlights the defendants’ repeated failure to provide sufficient assurances, prompting the need for court intervention.
As the situation unfolds, regulatory scrutiny continues to mount, potentially impacting the future of Binance and its affiliated entities.