- Binance CEO Changpeng “CZ” Zhao vehemently denies allegations of Binance.US’s usage of contentious entity, Ceffu.
- The SEC has raised concerns over Ceffu’s potential control over Binance.US customer assets.
- Amidst a legal standoff, a D.C. district judge urges both parties to cooperate and reduce tensions.
Binance’s CZ speaks out against the SEC’s allegations, clarifying the non-involvement of the controversial entity Ceffu in Binance.US’s operations.
CZ’s Assertion Against SEC Claims
Binance CEO Changpeng “CZ” Zhao strongly contested allegations made by the Securities and Exchange Commission (SEC) suggesting potential involvement of a contentious custody unit, potentially linked to Binance’s main operation, in Binance.US’s dealings. “For the record. Binance US does not use, and have NEVER used Ceffu or Binance Custody. You can’t just make this stuff up,” Zhao emphatically stated in a recent post on X, the social platform that was formerly Twitter.
The SEC’s Concern Over Ceffu
The focal point of the disagreement between Binance and the SEC is the entity Ceffu. The regulatory body has been continuously seeking clarification from BAM, the driving force behind Binance.US, regarding the management of customer assets. Despite its requests, the SEC claims that BAM has been evasive or has deemed certain inquiries too extensive. Specifically, the SEC is adamant about obtaining more details related to Ceffu, describing it as a “newly rebranded Binance Entity” with apparent authority over client funds. This issue becomes more complex as BAM is reportedly prohibited from utilizing a “foreign Binance affiliated third-party for wallet custody services,” according to a given consent order. Reports suggest that BAM’s statements about Ceffu and Binance’s involvement have been inconsistent, leading to increased scrutiny.
Judge’s Intervention in the Binance-US and SEC Dispute
In an attempt to mediate the escalating tension between the two entities, a D.C. district judge during a recent hearing encouraged both the SEC and BAM to find common ground and “turn down the temperature.” This lawsuit has its roots in the SEC’s claims from June, where it accused both the exchange and Zhao of not adhering to multiple federal securities laws, particularly regarding the oversight of the Binance.US platform. To further proceedings, both the SEC and BAM have mutually agreed to an upcoming hearing on Oct. 12 and have decided to present a joint status report by Oct. 10.
Conclusion
The ongoing battle between Binance, particularly its U.S. division, and the SEC illustrates the broader challenges and complexities that come with regulating the rapidly evolving world of cryptocurrencies. With leading industry figures like Changpeng “CZ” Zhao stepping up to clarify and defend their position, the resolution of this dispute will be keenly observed, potentially setting precedents for future regulatory confrontations in the crypto domain.
