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Crypto giant Binance controlled ‘independent’ U.S. affiliate’s bank accounts

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A senior Binance executive was the main operator for five bank accounts belonging to the giant cryptocurrency exchange’s purportedly independent U.S. affiliate, including an account that held American customers’ funds, bank records show.

U.S. lender Silvergate Bank authorized the executive, Guangying Chen, a close associate of Binance CEO Changpeng Zhao, to operate the accounts in 2019 and 2020, according to records from those years. This allowed Chen and her deputies to move funds held in the bank accounts. Employees at the affiliate, Binance.US, had to ask Chen’s team to process payments, even to cover the firm’s payroll, company messages show.

The new findings offer further detail into how Binance exercised tight control over Binance.US, despite both firms maintaining that they have always operated independently. The previously unreported bank records and messages show that Binance’s management over the U.S. business’s finances extended across its bank accounts at Silvergate and detail how this secret access was granted.

Binance.US has denied that Binance ever operated its bank accounts. Its head of legal, Krishna Juvvadi, told Reuters in April that employees of Binance.US’s operator, BAM Trading, had “exclusive control” since its founding in 2019.

In response to questions for this article, however, a Binance.US spokesperson, Christian Hertenstein, said that since the company’s current chief executive, Brian Shroder, took over in late 2021, “no one other than Binance.US officials have had control or access to Binance.US accounts.” Hertenstein did not explain the discrepancy in the time periods given by him and Juvvadi.

Binance and Silvergate, which collapsed in March and is winding down operations, did not respond to requests for comment.

Binance’s U.S. operations are facing ever-closer attention in Washington. By secretly retaining control over Binance.US’s finances, Zhao ensured he could direct the company’s expansion in the American crypto market – one of the world’s biggest – while keeping it apart from his global exchange that was under scrutiny from U.S. regulators.

The U.S. Commodity Futures Trading Commission in March charged Binance and Zhao with willful evasion of commodities laws by “intentionally structuring entities” to avoid U.S. regulations designed to protect investors. Zhao called the civil charges an “incomplete recitation of facts.” The CFTC had no comment for this article.

Reuters has previously reported that a deputy of Chen’s had access to one Binance.US Silvergate account and that the account transferred more than $400 million in 2021 to a trading firm controlled by Zhao. Binance.US has said the trading firm, Merit Peak, was withdrawing its own funds, money that derived from its trading activity on the exchange. Juvvadi said an investigation Binance.US conducted into Reuters’ previous findings found they were “simply not true.”

Reuters also reported on May 23 that Binance commingled its customers’ funds with its corporate revenues in Merit Peak’s Silvergate account, in breach of U.S. financial rules that require client money to be kept separate. Binance denied mixing customer deposits and company funds, saying that users who sent money to the account were not making deposits but rather buying Binance’s bespoke dollar-linked crypto token.

The Binance.US trading platform was launched by its operating firm, BAM Trading, in mid-2019 under chief executive Catherine Coley. Zhao owned BAM Trading through layers of offshore companies, company documents show. But Binance.US said it operated solely as a “US partner” of Binance. Reuters reported last year that, in fact, Zhao created Binance.US as a de-facto subsidiary to draw U.S. regulators’ scrutiny away from the global exchange.

In December 2019, a Binance.US employee told Coley that Silvergate wanted her to sign a banking resolution, a document that defines a firm’s banking relationship, to “make sure it is ok” for Chen to manage Binance.US’s bank accounts, according to messages exchanged between Binance.US employees. The resolution document, reviewed by Reuters and authored by a Silvergate relationship manager, requested that Coley authorize Chen to “open accounts, transact, and otherwise operate” accounts on behalf of BAM Trading. A person familiar with the document said Coley signed it.

Coley left Binance.US in 2021. A lawyer representing her, James McDonald, didn’t respond to requests for comment.

Chen then signed further agreements with Silvergate to act as the “Primary Admin User” for the five bank accounts: a customer deposit account; an account for corporate clients that later sent funds to Merit Peak; and three other accounts, according to bank records dated between December 2019 and January 2020. The agreements said the authorized person could withdraw funds from the accounts or deposit them, and designate others to do so, too.

Coley told colleagues in a message later that year that she and her finance team were not administrators for BAM’s accounts and only had view-access. The arrangement left Binance.US’s chief lacking ultimate control over the company’s own finances. “We cannot change anything” in the Silvergate banking portal, she wrote.

Hertenstein, the Binance.US spokesperson, told Reuters that “since at least 2021, the only ‘Primary Admins’ on active Binance.US accounts have been Binance.US officials.” He said some of the accounts identified by Reuters as being operated by Chen were “institutional client accounts,” without elaborating on their activity. 

After Chen gained authorization, her deputy, a Binance executive named Susan Li, took charge of managing the accounts’ transactions, including payments to cover Binance.US’s payroll, company messages show. “Approved from my end,” Li messaged a Binance.US employee after receiving one payroll request.

Chen, known as Heina, retained control over the accounts until at least early 2021, the messages show. The Silvergate documents she signed listed her address as in Shanghai. A Binance.US employee messaged colleagues in May 2020 to say Silvergate “was still waiting for Heina to sign the final paperwork” on a new bank account for the Binance.US exchange’s institutional customers.

Reuters could not determine if Chen or Li moved funds from the Binance.US customer deposit account. Neither Chen nor Li responded to questions from Reuters. 

“Customer funds have not been misused or co-mingled,” said Hertenstein at Binance.US.

Coley and her team repeatedly asked Li during 2020 for Binance to grant them control over Binance.US’s own bank accounts, at one point expressing concern about how regulators would view the situation, company messages show. “I think it makes sense BAM has its own login for the regulatory perspective,” a Binance.US finance director wrote to Li in November. 

Coley also later expressed worries to Li that the transfers to Merit Peak were taking place without her knowledge, according to messages Reuters previously reported.

Binance.US did not answer questions about Chen’s role, including her control of the accounts or when it may have ended. It is “difficult to speak to each and every detail” because the company’s “management team has turned over completely since the time period in question,” Hertenstein said.

Juvvadi, Binance.US’s head of legal, said the fund flows to Merit Peak were all proper. The internal investigation matched all the transfers to Merit Peak with withdrawals the trading firm made from its own digital asset account on the Binance.US platform, he said. “All the funds belonged to Merit Peak,” he said. 

Juvvadi declined to elaborate on Merit Peak’s trading activity or Zhao’s role at the firm. 

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Dillard’s, Inc. Announces $0.25 Cash Dividend

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MODULAR ATP Study of the mCRM™ System Meets Primary Safety and Efficacy Endpoints

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Additional data from APPRAISE ATP trial reinforce modular therapy approach with EMBLEM™ Subcutaneous Implantable Defibrillator and EMPOWER™ Leadless Pacemaker

MARLBOROUGH, Mass., May 18, 2024 /PRNewswire/ — Boston Scientific Corporation (NYSE: NYSE:) today announced positive six-month results from the ongoing pivotal MODULAR ATP clinical trial of the mCRM™ System, the first modular cardiac rhythm management (CRM) system that consists of the EMBLEM™ Subcutaneous Implantable Defibrillator (S-ICD) System and the EMPOWER™ Leadless Pacemaker (LP). As components of the mCRM System, the devices are designed to work together wirelessly to coordinate painless intracardiac anti-tachycardia pacing (ATP) therapy, provide rate-responsive bradycardia pacing support and to prevent sudden cardiac death without the risk of leads in the heart or under the sternum. Findings were presented at Heart Rhythm 2024, the annual meeting of the Heart Rhythm Society, and simultaneously published in The New England Journal of Medicine.

In addition to evaluating the safety and performance of the EMPOWER LP as a standalone pacemaker, the trial evaluated the ability of the EMBLEM S-ICD System to successfully communicate a wireless request to the LP to deliver ATP therapy. Findings from the trial met all pre-specified six-month safety and effectiveness endpoints, and demonstrated:

  • A major complication-free rate of 97.5% after implantation of the EMPOWER LP.1
  • A communication success rate of 98.8% from the EMBLEM S-ICD System to the EMPOWER LP.2
  • An ATP success rate of 61.3%,3 and no patient requests for deactivation of ATP or bradycardia pacing due to pain or discomfort.
  • Pacing capture thresholds, which indicate stable device fixation within the heart, of ‰¤ 2.0 V at 0.4 ms in 97.4% of patients.

“We saw excellent overall clinical performance of the mCRM System in this study, including a high rate of communication success from the S-ICD to the leadless pacemaker, and a low rate of major leadless pacemaker complications,” said Prof. Reinoud Knops, M.D., Ph.D., Department of Cardiology and Electrophysiology, Amsterdam UMC, Amsterdam, Netherlands. “These findings are noteworthy, as high percentages of communication success and pain-free termination of spontaneous arrhythmia episodes indicate a potential upgrade pathway for patients currently implanted with an S-ICD who develop a need for ATP or pacing.”

Also presented at Heart Rhythm 2024 were results from the APPRAISE ATP clinical trial “ a prospective, randomized, multicenter study evaluating ATP as a primary strategy for terminating ventricular tachycardias in primary prevention (PP) patients (i.e., those without a history of spontaneous sustained ventricular arrhythmias). The trial enrolled 2,626 PP patients indicated to receive an ICD at 134 centers globally and is the largest head-to-head trial of ATP in this patient group. In the study, patients were randomized 1:1 to standard transvenous-ICD therapy “ ATP plus an ICD-delivered shock to terminate a ventricular tachycardia “ versus shock only. Across five years of follow up, data demonstrated a statistically significant, but small absolute first all-cause shock reduction in only 1% of patients per year. Shock burden, or the number of shocks experienced by a patient, was not significantly different between the two arms, and the vast majority of patients in the ATP-plus-shock arm did not require ATP therapy.

“Together, data from the MODULAR ATP and APPRAISE ATP trials reinforce the promise of the groundbreaking mCRM System, illustrating a clear path forward for physicians to offer therapies that prevent sudden cardiac death and deliver ATP for the small number of patients who benefit from it,” said Kenneth Stein, M.D., senior vice president and global chief medical officer, Boston Scientific. “Instead of subjecting all patients to the risks of more invasive approaches, such as placing leads in the heart or tunneling them under the sternum to provide therapies they might not require, these data indicate physicians may have the opportunity to tailor therapy to the patient’s individual needs and health.”

The company anticipates U.S. Food and Drug Administration approval of the mCRM System in 2025. For more information on the mCRM System and MODULAR ATP trial, visit www.bostonscientific.com/mcrm. To learn more about the EMBLEM MRI S-ICD System, visit www.sicdsystem.com.

The EMPOWER LP is an investigational device and limited by U.S. law to investigational use only. It is not available for sale. Some device references are for informational purposes only and are pending CE Mark. Not available in the European Economic Area.

Dr. Reinoud Knops is a paid consultant of Boston Scientific Corporation. He has not been compensated in connection with this press release.

About Boston Scientific
Boston Scientific transforms lives through innovative medical technologies that improve the health of patients around the world. As a global medical technology leader for more than 40 years, we advance science for life by providing a broad range of high-performance solutions that address unmet patient needs and reduce the cost of healthcare. Our portfolio of devices and therapies helps physicians diagnose and treat complex cardiovascular, respiratory, digestive, oncological, neurological and urological diseases and conditions. Learn more at www.bostonscientific.com and connect on LinkedIn and X, formerly Twitter.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by words like “anticipate,” “expect,” “project,” “believe,” “plan,” “estimate,” “intend” and similar words. These forward-looking statements are based on our beliefs, assumptions and estimates using information available to us at the time and are not intended to be guarantees of future events or performance. These forward-looking statements include, among other things, statements regarding our business plans and product performance and impact, and new and anticipated product approvals and launches. If our underlying assumptions turn out to be incorrect, or if certain risks or uncertainties materialize, actual results could vary materially from the expectations and projections expressed or implied by our forward-looking statements. These factors, in some cases, have affected and in the future (together with other factors) could affect our ability to implement our business strategy and may cause actual results to differ materially from those contemplated by the statements expressed in this press release. As a result, readers are cautioned not to place undue reliance on any of our forward-looking statements.

Factors that may cause such differences include, among other things: future economic, competitive, reimbursement and regulatory conditions; manufacturing, distribution and supply chain disruptions and cost increases; variations in outcomes of ongoing and future clinical trials and market studies; new product introductions; demographic trends; intellectual property; litigation; financial market conditions; and future business decisions made by us and our competitors. All of these factors are difficult or impossible to predict accurately and many of them are beyond our control. For a further list and description of these and other important risks and uncertainties that may affect our future operations, see Part I, Item 1A “ Risk Factors in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, which we may update in Part II, Item 1A “ Risk Factors in Quarterly Reports on Form 10-Q we have filed or will file hereafter. We disclaim any intention or obligation to publicly update or revise any forward-looking statements to reflect any change in our expectations or in events, conditions or circumstances on which those expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements, except as required by law. This cautionary statement is applicable to all forward-looking statements contained in this document.

CONTACTS:Steve Bailey
Media Relations
(651) 582-4343 (office)
Steve.Bailey@bsci.com

Jon Monson
Investor Relations
(508) 683-5450
BSXInvestorRelations@bsci.com

1 Major complications defined as any complication related to the EMPOWER LP or its implantation procedure that results in system revision, permanent loss of LP function, hospitalization, or death.
2 During communication tests, the S-ICD attempted to command the LP to deliver pacing at a rate approximately 10 beats per minute faster than the patient’s intrinsic rhythm.
3 ATP success rate defined as terminating ventricular arrhythmia.

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Adidas plans cheaper versions of popular shoes

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(Corrects May 16 story to reflect error in live translation, Adidas (OTC:) is making cheaper versions for Deichmann and Intersport, not Foot Locker (NYSE:))

By Linda Pasquini

(Reuters) -Adidas is launching cheaper versions of its three-striped shoes like the white and black suede Samba as it aims to spread the trend, CEO Bjorn Gulden said on Thursday at the company’s annual shareholders’ meeting in Germany.

“It’s important to understand that not everyone can afford to buy a shoe for 120 or 150 [dollars], but everyone wants to take part in the same trends,” Gulden told investors in a presentation in Furth, near Adidas’ headquarters in Herzogenaurach.

Adidas will offer similar versions of the Samba and other shoes for $60 to $80, more affordable entry points than the $100 to $150 price tag for the main shoe lines, according to a presentation slide shown by Gulden.

“What we do at the top, 100 [dollars] and higher, we’re bringing that down,” Gulden said. The cheaper models are aimed at retailers like Deichmann and Intersport, he added.

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