According to statements from a senator, U.S. Congress may hold inquiry into Binance.US. over its connection to Merit Peak.
A senator was quoted by Reuters on February 17 as saying that the U.S. Congress should conduct an investigation into Binance.US. Senator Roger Marshall stated:
“Something fishy is going on here that clearly doesn’t pass the smell test…Congress needs answers, and Binance.US and Silvergate are obligated to give them to us.”
On February 16, it was revealed that $400 million had been transferred by Binance.US from a Silvergate Bank account to the trading company Merit Peak in 2021.
As Binance and Binance.US are intended to function independently, the link between Merit Peak and Changpeng Zhao, CEO of Binance, raises the possibility of a conflict of interest.
Following the publication of that article, Binance.US officially acknowledged on Twitter that Merit Peak had used its system but had “stopped all activity on [Binance.US] in 2021.”
Although Binance.US provided Reuters with a similar remark in private yesterday, it also elaborated on that position in a public tweet today. It stated that the only people with access to firm bank accounts are employees of Binance.US.
Additionally, it stated that Merit Peak and other external market makers must compete honestly and openly for discounts. Binance US further stated that it would never exchange or lend out consumer monies.
The firm expressed its distaste for high-profile business failures brought on by fund commingling, probably referring to FTX and Alameda Research’s demise.
According to a Wall Street Journal report from February 15th, Binance’s international division has faced with various regulatory intrusions and actually anticipates paying fines to U.S. officials.
With the exception of a previous and current SEC inquiry into the Merit Peak case, Binance.US has not frequently been the subject of such scrutiny. If Senator Marshall’s advice from today is accepted by Congress and goes beyond being a private remark, the US may soon be subject to greater scrutiny.
Marshall has previously worked on a crypto anti-money laundering law as well as a legislative investigation into the connection between FTX and Silvergate.
