SEC Documents Reveal Binance.US Suffered $181M Loss in 20229. Juni 2023
• Binance.US recorded a loss of $181 million in 2022, despite receiving $132 million from its parent company BAM Management.
• SEC documents also revealed a flow of funds between Binance.US and entities controlled by Changpeng Zhao (CZ), including the transfer of $21.6 billion to Paxos Trust Company.
• The SEC lawsuit against Binance is seen as part of a broader crackdown on crypto in the US, with rival exchange Coinbase also targeted by the regulator.
Binance.US Suffers Losses Despite Investment
Binance’s US branch, Binance.US, was deeply unprofitable in 2022 and lost as much as $181 million for the year, according to a filing made by the Securities and Exchange Commission (SEC). This comes despite Binance.US receiving some $132 million last year from its parent company BAM Management due to challenging market conditions in crypto, as reported by FGMK, an auditor hired by Binance.US. The exchange further recorded approximately $150 million in revenue for 2021 driven by surging crypto prices and increased enthusiasm among investors that year. In 2020, however, it incurred a loss of nearly $400,000 during its first operational year.
Funds Transferred Between CZ Entities
The SEC documents unveiled a flow of funds between Binance.US and various other entities controlled by Binance CEO Changpeng Zhao (CZ), including a transfer of $21.6 billion to Paxos Trust Company – the issuer of Binance’s stablecoin: BUSD. Accounts held at the now-defunct Signature Bank were also highlighted alongside numerous foreign entities established in countries such as Canada, UAE, Seychelles, Singapore Lithuania and Kazakhstan – some bearing “Binance” as part of their name or title..
SEC Targeting Crypto Exchanges
The SEC’s lawsuit against Binance is widely seen as part of a broader crackdown on crypto exchanges operating without proper registration in the US; with rival exchange Coinbase already targeted over listing tokens classified as “securities” without registering them with the regulator first – which is illegal under US law – along with facilitating trading without being registered as securities exchanges either..
Crypto Regulations & Compliance
The filing comes amid increasing regulations and compliance requirements for cryptocurrency businesses worldwide; with many jurisdictions revising existing laws or introducing new ones to better regulate digital asset markets while creating legal frameworks for blockchain-based platforms and services too..
In conclusion, it appears that regulators are stepping up enforcement against cryptocurrency businesses operating without proper registration or failing to meet other compliance requirements; creating more uncertainty about how these companies will be able to operate going forward if they fail to comply fully with all applicable rules and regulations..