Binance’s crypto custody platform Ceffu made a statement on Wednesday. He mentioned that the storage platform maintains separate accounts and wallets. That’s why customers’ crypto assets in cold wallets are never mixed, he said. The move came as Reuters once again accused the Binance exchange of mixing user funds in accounts held at Silvergate Bank. Here are the details…
Question marks about the funds of the Binance exchange re-emerged
Binance was accused of violating US financial rules that require customer money to be kept separate. Allegedly, the stock market mixed billions of dollars in client funds in accounts held at the sinking Silvergate Bank with company revenue. On February 10, 2021, Binance mixed $20 million from an institutional account with $15 million from an account that received client funds. Meanwhile, the Binance Coin (BNB) price, which started a promising recovery rally, was hampered by this development in the Binance ecosystem.
🧵 The foundation of our custody platform runs on segregated account and wallet systems, which means our clients' assets deposited in cold wallets are never commingled.
In this thread, we explore how this foundation powers Mirror, our off-exchange settlement solution. pic.twitter.com/AzqDqpB7cA
— Ceffu (@CeffuGlobal) May 24, 2023
According to a Reuters report, the exchange is facing charges of violating US financial rules that require customer money to be kept separate. However, Binance executives completely dismissed the report, claiming the story was false and weak. In fact, Binance CEO “CZ” completely ignored the report. cryptocoin.comAs we reported, he was busy with Bitcoin Pizza Day on May 22.
Ceffu made a statement
Binance’s institutional custody solution, Ceffu, tweeted to its institutional clients to explain that the custody platform operates on separate account and wallet systems. Thus, he mentioned that clients never mix assets deposited in cold wallets. Ceffu also explained how the over-the-counter settlement solution Mirror is completely safe and secure. After institutional clients lock their digital assets in the Ceffu cold wallet, the wallet credits the amount of crypto assets to their Binance exchange accounts in a 1:1 ratio. Also, “assets always stay in their cold wallet in Ceffu.”
Ceffu allows customers to trade crypto assets on Binance exchange from the security of their cold wallet. It is the only institutional custodian that integrates with Binance. Ceffu used the following statements:
Our solutions are ISO 27001/27701 certified, SOC 2 Type 1 and Type 2 certified, and receive periodic security reviews that demonstrate our commitment to asset and information security and data privacy. Our cold wallets are also covered by third-party type insurance.
Reuters Binance spreads FUD
Binance chief communications officer Patrick Hillman and Binance spokesperson Brad Jaffe confirmed that funds were not mixed through Silvergate Bank accounts. The CEO of the exchange has said many times before that there are efforts by Reuters to spread the FUD surrounding the stock market. He explained that the same journalist continues to target Binance with missing facts and data.
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
In May, the exchange said that Reuters had overlooked critical facts in its report about Israeli authorities’ seizure of 190 Binance crypto accounts linked to terrorist groups such as Hamas and Daesh since 2021. Previously, the exchange had also objected to Reuters reports that the exchange’s anti-money laundering controls were weak.
BNB price has been affected by this
The news had a bearish effect on Binance Coin. A clear attempt to break above the downtrend line was a blow. As the selling pressure from the 50- and 100-day Exponential Moving Averages (EMA) continues to put pressure on BNB, BNB price could drop further.
According to analyst Lockridge Okoth, there could be a pullback near the May low of $301.3, or at worst, Binance Coin price could slide below this support level and hit the $283.3 support level before a potential trend reversal. This bearish view is powered by the Relative Strength Index (RSI), which has lost positive ground as it eases towards the midline.
