Binance denies that users were affected by an alleged $1.8 billion stablecoin transfer

Binance denied it in February. 27 that its alleged decision to transfer $1.8 billion in stablecoin collateral to hedge funds had any impact on users’ holdings.

In a statement to Forbes, Patrick Hillman, Chief Strategy Officer at Binance, noted that user funds were not used for these ends. He said:

‘There was no mixing’ [Hillman said]Because “there are wallets and then there are ledgers.”

Hillman did not directly say whether any funds were transferred, and Forbes confirmed that Binance failed to disclose some of the transfers despite Hillman’s statement.

In the same report, Forbes claimed that based on blockchain records, Binance had transferred $1.8 billion in stablecoin collateral to several hedge funds.

Notably, Forbes accused Binance of sending $1.1 billion to Cumberland DRW. The company supposedly helped Binance transfer funds into Binance USD (BUSD).

Forbes also said that Binance sent an unspecified amount of money to Alameda Research – the hedge fund closely associated with the failed FTX exchange. Forbes went on to call Binance’s actions “reminiscent” of the mismanagement of FTX itself.

Forbes also named two other entities — the Amber Group and Tron — as recipients of “millions of dollars” worth of guarantees in its original report. Alameda and the Amber and Tron group received a combined $201 million, according to Forbes.

Presumably, the funds transferred by Binance were intended to support its B-peg USDC stablecoin. Forbes referred to these assets as “digital copies” of Circle’s USDC — or assets pegged to a value of USDC so that they can be traded on Binance’s blockchain. If Forbes’ accusations are true, users may be left with unsecured stablecoins.

Binance has previously been the target of similar accusations. in january. 10, the company admitted that the B-peg BUSD token was unsecured by up to $1 billion at times. The company said at the time it had improved its practices.

Binance’s stablecoin policies are in a state of flux. Binance CEO Changpeng Zhao recently stated that Binance will reduce reliance on BUT Continue to support BUSD as the issuance expires. In September, the exchange said it would reduce support for stablecoins other than Tether.