Binance Blasts 'Desperate' Reuters Report It Commingled Customer and Company Funds

"We’ve addressed this on multiple occasions. We keep our user and corporate funds on completely separate ledgers," Patrick Hillmann, Binance's chief communications officer tweeted on Tuesday, though he did not outright deny the report's claims.

AccessTimeIconMay 23, 2023 at 4:05 p.m. UTC
Updated May 23, 2023 at 9:13 p.m. UTC

Binance is firing back at a Reuters special report from Tuesday that said the crypto exchange commingled customer funds with company revenue.

The report, citing unnamed "former insiders," said the funds in question "ran into billions of dollars" and that "commingling happened almost daily" in accounts the exchange had at collapsed U.S. lender Silvergate Bank. It also said Reuters did not find evidence that clients' funds were "lost or taken." Reuters had previously reported that Binance had been able to access and transfer funds belonging to Binance.US in a Silvergate account, a claim neither Binance nor Binance.US refuted.

"Commingling" or the mixing of customer and company funds has become a bit of a dreaded buzz word in the crypto sphere since revelations following the fall of exchange giant FTX in November last year gave rise to concerns the practice may be widespread in the industry.

Binance itself has faced allegations of mixing funds when a Bloomberg report from January revealed the exchange had mistakenly kept collateral for certain crypto assets it issued in the same wallet as funds belonging to customers.

The fund flows Reuters described in Tuesday's report "indicate a lack of internal controls to ensure customer funds were clearly identifiable and segregated from company revenues," according to three former U.S. regulators cited in the article, who also said the "commingling" obscured the whereabouts of customer funds.

But the exchange took aim at the Reuters report with Binance's Chief Communications Officer Patrick Hillmann calling it "weak" and full of "conspiracy theories."

"Let me explain just how desperate a journalist @Reuters is to publish a negative story," Hillmann said before launching into a five-paragraph Twitter tirade following the publication of the article – which didn't outright deny the allegations made in the report.

Later, Hillmann wrote the exchange had addressed the issue "on multiple occasions."

"We keep our user and corporate funds on completely separate ledgers... We know who their sources are and @Reuters will be embarrassed when it becomes public," Hillmann tweeted referring to the former insiders cited by the news outlet.

Hillmann also accused Reuters of "xenophobia" for mentioning Binance founder Changpeng Zhao's ethnicity "without noting that he’s been Canadian since the age of 12."

Following the publication of this article, Hillmann tweeted he "very clearly refuted" Reuters' claims in his initial response, adding the funds in question "were Binance's corporate funds" from the sale of BUSD stablecoins.

CoinDesk has reached out to Reuters for comment.

Update (May 23, 21:13 UTC): Adds Hillmann's tweeted response following the publication of the article.

Edited by Nikhilesh De.


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Sandali Handagama

Sandali Handagama is CoinDesk's deputy managing editor for policy and regulations, EMEA. She does not own any crypto.