Binance CEO CZ Sets the Record Straight on $250M Loan Claims

2023-09-21 13:15:36

Binance CEO Changpeng ‘CZ’ Zhao has refuted a recent report alleging that he received a $250 million loan from BAM Management, the company that serves as the holding entity for Binance.US.

The development comes amidst Binance’s struggles with plunging trading volume as the world’s largest cryptocurrency exchange faces mounting lawsuits and increased regulatory scrutiny.

CZ Reacts to ‘Mysterious Money Movement’

The report, published by Decrypt on September 19th, drew its conclusions from court documents associated with an ongoing lawsuit involving Binance and the United States Securities and Exchange Commission. According to the news agency’s interpretation, Binance.US’ legal representatives asserted in the documents that BAM Management US Holdings had issued a $250 million convertible note to Zhao in December.

CZ, however, challenged the accuracy of the report and tweeted,

“The amount of wrong information is just…They got the direction wrong. I loaned $250 million to BAM a while back, not the other way around. And have not taken it back.”

The Binance CEO clarified that the loan arrangement was, in fact, the opposite of what was reported. In the post, the explained that he had extended a $250 million loan to BAM Management, and he asserted that he had not yet received repayment.

A Setback for SEC

The legal battle has taken a toll on Binance.US, which saw a flurry of employee departures. The United States Securities and Exchange Commission (SEC) has alleged that Binance was not cooperating in the ongoing probe and claimed that the BAM refused to make essential witnesses available for deposition.

Concerns were also raised on Ceffu – which happens to be a custody service offered by Binance’s international arm – Binance Holdings Ltd. The SEC’s filing claimed that the platform appeared to be in violation of a previous agreement designed to prevent the transfer of assets abroad.

Despite the scathing attacks by the financial regulator, Binance scored a small win this week. The SEC’smotion to approve an inspection into Binance.US was denied by the US D.C District Judge, Zia Faruqui.

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