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

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."

CoinDesk has reached out to Reuters for comment.

Let me explain just how desperate a journalist @Reuters is to publish a negative story. The whole base of their story this morning, is that when users purchased BUSD (Paxos) from Binance, they were taken to a transaction page that had the term “deposit” on it. Users were making a…

— Patrick Hillmann (@PRHillmann) May 23, 2023

Read more: Binance Mistakenly Mixed Crypto Exchange's Customer Funds With B-Token Collateral: Bloomberg