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Documents Reveal Binance.US Suffered a $181 Million Loss in 2022

Fredrik Vold
Last updated: | 1 min read
Source: AdobeStock / piter2121

Binance’s US branch, Binance.US, was deeply unprofitable in 2022 and lost as much as $181 million for the year, a new filing made by the Securities and Exchange Commission (SEC) has revealed.

The loss came despite Binance.US receiving some $132 million last year from its parent company BAM Management, and occurred due to challenging market conditions in crypto, according to FGMK, an auditor hired by Binance.US.

The news was first reported by the Wall Street Journal on Wednesday.

Judging from the filed documents, Binance.US further recorded approximately $150 million in revenue for 2021, driven by surging crypto prices and increased enthusiasm among crypto investors that year.

However, during its first operational year in 2020, Binance.US incurred a loss of nearly $400,000.

Notably, the SEC filings unveiled a flow of funds between Binance.US and various other entities controlled by Binance CEO Changpeng Zhao (CZ), including a transfer of $21.6 billion to Paxos Trust Company, the issuer of Binance’s stablecoin, Binance USD (BUSD).

The filing comes in relation to a lawsuit by the SEC against Binance announced on Monday this week, where the regulator said Binance and its CEO CZ had shown “blatant disregard” for its rules.

The SEC documents also shed light on other parts of CZ’s crypto empire, including numerous foreign entities linked to him, and accounts held at the now-defunct Signature Bank.

The entities were established in countries such as Canada, the United Arab Emirates (UAE), the Seychelles, Singapore, Lithuania, and Kazakhstan, with only some bearing the word “Binance” as part of their name.

Part of broader crypto crackdown

The SEC’s lawsuit against Binance is widely seen as part of a broader crackdown on crypto in the US.

So far, rival exchange Coinbase has also been targeted by the SEC, with the regulator highlighting several tokens listed on the platform as being classified as “securities.”

Selling and promoting securities that are not registered with the SEC is in violation of US law, and the SEC has also argued that exchanges that facilitate trading in these tokens are violating the law by not registering as securities exchanges with the regulator.