A shareholder of Binance UK claims that the exchange submitted "grossly inaccurate" statements in 2020.

Kutl Ahmedia

The co-owner of a Binance UK subsidiary called Dimplx has accused the biggest cryptocurrency exchange in the world of releasing a "grossly misleading" annual report in 2020. The directors of Dimplx claimed that financial statements for one of Binance's UK-based businesses "do not appropriately disclose" the nature of the company's operations or its assets and liabilities, "including potential tax liabilities," as well as its revenue. The claim was made this month by Dimplx, which was established in 2019 as a result of a joint venture with Binance.

Dimplx's annual report was submitted to the UK Companies House registrar, according to a Financial Times report. Binance Digital's "turnover, assets, liabilities, including prospective tax obligations, net earnings, nature of operations and/or linked party transactions, were not fairly represented," according to the lawsuit.

In Dimplex's annual report for February 2021, company directors Simon Dingle and Joshin Raghubar make a number of claims regarding inaccuracies in Binance Digital's 2020 financial accounts. In accordance with a statement made by Binance, the company's digital division closed the year 2020 with around £100 million (or Rs. 919 crore) in "cash and bank balances," while the same sum was owing to "creditors."

The £100 million (approximately Rs. 919 crore), according to the directors of Dimplex, represents balances that were stored "on behalf of Binance Digital customers who had visited binance.com" and would be "liable to pay transaction fees." On client transactions documented throughout the fiscal year, the financial accounts revealed "zero turnover or fees."

Being a UK stakeholder of the exchange, Dimplx claims that the information was intentionally misfiled and has questioned the financial accounts for the fiscal quarter ending on April 14, 2022. Determining the current fair value of Dimplx Limited's ownership interest in Binance Digital is therefore challenging for the shareholder.

In a statement to CoinDesk, Binance addressed the charges and stated that it was unable to completely address them but understood "that the minority owners are frustrated that the joint venture did not generate fruit."

The latest claim calls into question the part UK businesses played in Binance's international activities prior to its warning from the UK's financial watchdog, the Financial Conduct Authority (FCA).

In June 2021, the FCA warned consumers about Binance Markets, a UK branch of the Binance business, and prohibited it from carrying out any regulated activities in the country. The government claimed that Binance had neglected to submit fundamental details concerning its operations, including as "trading identities and functions for all group businesses globally."

The FCA expressed worry over the exchange's agreement with payment processor Paysafe in February 2022. It sparked fresh questions regarding a collaboration between EQONEX, a provider of financial services, and a subsidiary of Binance called Bifinity a month later.


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