Binance Accused of Filing Inaccurate Financials by UK Subsidiary Shareholder
Dimplx Limited may obtain a court-ordered valuation of its ownership stake in Binance’s U.K. subsidiary, which it says was misrepresented in filings.
Cryptocurrency exchange Binance is facing criticism from a co-owner of its U.K. subsidiary for allegedly misrepresenting the shareholder's ownership stake in official company filings.
“Binance Digital’s turnover, assets, liabilities, including potential tax liabilities, net profits, nature of operations and/or related party transactions,” were not accurately represented, Dimplx directors said in an annual report filed on Sept. 28 with the U.K. companies registrar.
The world’s largest crypto exchange by trade volume, Binance is no stranger to controversy – it still has no headquarters and has received warnings from regulators from all over the world including in the U.K., Japan, Uzbekistan and Israel. The U.K.’s financial regulator in particular, has been keeping a close eye on the company’s activities, as it is not authorized to operate in the country.
In the Dimplx annual report, the directors alleged the audited Binance Digital financial statements for the period ending on Dec. 30, 2020, were inaccurate and incorrectly recorded the share capital allotted to Dimplx. Amended financial statements for the same period filed on April 14, 2022, "remain unreliable for the purposes of determining the present fair value of Dimplx Limited’s shareholding in Binance Digital,” the report said.
To get a fair determination of Dimplx’ ownership stake in Binance Digital, the company will need an accurate assessment of all transactions, income, liabilities and taxes associated with the subsidiary, the report said, adding that it is engaged in legal correspondence with Binance Digital.
“Dimplx Limited has reserved its right to obtain a court ordered valuation of its shareholding as well as its right to seek both ordinary and exemplary damages/ or an order directing an exchange of its shares at a value to be determined by order of court,” the report said.
“In light of threats of litigation from the minority shareholders, Binance is not able to respond fully to the allegations,” a Binance spokesperson said in an email to CoinDesk. "However, we understand that the minority shareholders are disappointed that the joint venture did not bear fruit."
Dimplx did not respond to a request for comment by press time.
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