Court documents: Exchange Binance had transactions totaling $70 billion with bankrupt banks Silvergate and Signature.

Bloomberg reports that according to documents filed with the SEC, cryptocurrency exchange Binance has transacted up to $70 billion through Silvergate and Signature in the past.

Bankrupt Banks Silvergate and Signature Processed Large Cash Flows for Binance

According to documents filed on Wednesday, from 2019 to the present, the cryptocurrency exchange Binance and its affiliated entities have transferred approximately $70 billion through bankrupt banks Silvergate and Signature, involving large sums of money entering and exiting within a short period. The documents indicate that Silvergate provided over $50 billion in deposits to Binance-related entities, while Signature processed over $19 billion, with some of the funds flowing to foreign entities.

A Life Review of Crypto-Friendly Bank Silvergate

Flagstar Bank Takes Over Signature

SEC Files Lawsuit Against Binance for Violating Securities Laws

In documents filed this week, the U.S. Securities and Exchange Commission (SEC) sued Binance, its co-founder Changpeng Zhao (CZ), and Binance.US for "flagrantly flouting" U.S. securities laws, including mishandling customer funds and misleading investors and regulators. On Tuesday, the SEC also filed an emergency action application to freeze assets of Binance.US to protect customer funds, including through repatriating investments from overseas customers.

Details: SEC Seeks Temporary Restraining Order to Freeze Binance.US Assets

It should be noted that there was misinformation circulating that a U.S. court had approved the freeze on 6/7, the source of the information was incorrect.

Binance's Fund Records at Silvergate

The lawsuit documents reveal that in 2020 and 2021, an entity named Key Vision affiliated with Binance made deposits and withdrawals totaling over $13 billion with Silvergate. Almost all deposits were then transferred to an entity called Merit Peak, referred to in the SEC lawsuit as controlled by Changpeng Zhao.

The Merit Peak account received $22 billion, including around $11 billion from Key Vision, $7.2 billion from other Binance affiliates, and $1.2 billion from BAM Trading, a company entity of Binance.US. Merit Peak transferred most of the funds, $21.6 billion, to the overseas branch of Binance's stablecoin partner Paxos.

Furthermore, the documents show that Silvergate requested the closure of Binance-related accounts in December last year, and by the end of March, the balances in these accounts had been zeroed out.