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The allegation is that customer funds were inappropriately used/commingled by Binance entities, putting customers at risk of loss. That's the primary risk they'
by seanhunter 3y ago
The allegation is that customer funds were inappropriately used/commingled by Binance entities, putting customers at risk of loss. That's the primary risk they're talking about.
People getting scammed by inappropriate marketing of unregulated securities is a secondary risk.
People losing money due to market abuse is a tertiary risk.
- charcircuit 3y agoWhat's the risk of commingling? As long as the balances are recorded you can undo the commingling.
- dghlsakjg 3y agoThere is the legal risk (it's illegal). Also, its a bad practice for, well, a lot of reasons. You assume that all balances are positive, and that they haven't used that account for auditing purposes, or to commit some plain old investor fraud by claiming to have more cash than they do. What happens if the balances aren't recorded accurately? There's a million reasons that commingling funds is incredibly bad practice.
- deleted 3y ago[deleted]
- seanhunter 3y agoFirstly as the sibling said it’s bad practise and puts your clients’ funds at risk if there is a problem somewhere else in the business eg fraud or just poor record-keeping. Secondly it’s often a violation of the asset management contract terms (see the section on “Illegal commingling” here https://www.investopedia.com/terms/c/commingling.asp https://www.investopedia.com/terms/c/commingling.asp