Binance, one of the world’s largest cryptocurrency exchanges, and its CEO Changpeng ‘CZ’ Zhao, along with Guangying ‘Helina’ Chen, are facing serious allegations by the Securities and Exchange Commission (SEC).
According to court documents, the SEC claims that billions of dollars of customer funds were received by Zhao and Chen through their holding company.
The regulatory body has presented evidence suggesting that the funds were funneled through an intermediary holding company called Key Vision Development Limited.
Details of the Allegations:
Testimony provided by Sachin Verma, an accountant employed by the SEC, forms a crucial part of the regulator’s case. The evidence suggests that the funds were transferred to firms controlled by Zhao, raising questions about the nature of these transactions.
The court filing highlights that the SEC is puzzled by the involvement of a Zhao-controlled entity, supposedly trading on the Binance.US Platform with his personal funds, acting as a ‘pass-through’ account for billions of dollars belonging to Binance Platforms customers.
Forensic Analysis and Offshore Accounts:
Verma’s forensic analysis of bank statements reveals that $12 billion was sent to Zhao, while $162 million was transferred to a company controlled by Guangying Chen in Singapore.
Interestingly, the SEC notes that both Chen and Zhao controlled several companies with no apparent connection to Binance, suggesting a complex web of entities.
Additionally, the regulatory body asserts that a significant portion of the funds sent to Zhao and Chen now reside in offshore accounts.
Role of Guangying ‘Helina’ Chen:
Chen, identified as Binance’s back office and financial manager, has come under scrutiny for allegedly controlling accounts associated with Binance.US, despite claims of the unit’s independence.
This contradiction further adds to the regulatory concerns surrounding the management of customer deposits and company funds.
Binance’s Denial:
Binance, in response to these allegations, has publicly denied any commingling of customer deposits and company funds.
The exchange insists that Merit Peak, mentioned in the court documents, serves as a vehicle for CZ to trade his personal wealth, emphasizing a separation between personal and business finances.
