There have been signs all along that paint some of Binance's recent dealings in a less-than-stellar light. However, ever since the SEC upped its scrutiny of the world's biggest crypto exchange, the company's internal contradictions have been laid bare for everyone to peruse. Currently, when the need for Binance to be forthright has never been greater, it appears that its CEO, Changpeng Zhao (CZ), has resorted to pushing seemingly misleading statements.
For the benefit of those who might not be aware, the SEC lobbed 13 charges against Binance and its CEO, Changpeng Zhao (CZ), back in June, accusing the world's largest crypto exchange of subverting established rules to allow high-net-worth individuals in the US to access Binance's offshore services, comingling of customer and corporate assets and funds, wash trading via affiliated entities, lack of KYC, and outright embezzlement on the part of CZ.
The SEC also filed a restraining order against Binance in June, seeking to freeze the assets of Binance US while exempting customer withdrawals.
On Monday, the SEC sought permission from the presiding federal judge in its case against the crypto exchange to examine the technical infrastructure of Binance US, exhorting the judge to force the company to comply with its request for additional information. This expansive request, however, was denied, with the presiding judge urging the apex financial regulator in the US to come up with more "tailored" requests.
UPDATE: SEC Urges Court Inspection of Binance US Over Document Compliance Concerns
The
SEC is pushing for a court inspection of Binance US, alleging the exchange's failure to provide requested documents in an ongoing unlicensed securities trading case.
The SEC is… pic.twitter.com/7CigiFVJgb
— Ijaz Awan (@realijazawan) September 18, 2023
Bear in mind that the SEC believes the supposed separation between Binance and its US affiliate, Binance US, to be of a mere cosmetic nature, allowing the crypto exchange to funnel the funds of its clients out of the US in contravention of the established securities rules. Specifically, the SEC believes that Ceffu, an asset custody platform that was rebranded from 'Binance Custody' earlier this year, has been pivotal in facilitating this unchecked movement of funds. \
For the record. Binance US does not use, and have NEVER used Ceffu or Binance Custody.
You can't just make this stuff up.
https://t.co/JIkIVTf8tc
— CZ
Binance (@cz_binance) September 19, 2023
For its part, Ceffu has denied any involvement with Binance US. What's more, CZ has categorically rejected the notion of Binance US ever having used the services of Ceffu in a dedicated tweet.
CZ Binance caught lying once again.
This time, he denies that Binance US was using (Ceffu) Binance Holdings Limited to custody their funds. However, according to the court documents his own lawyer submitted, they did.
Binance also quietly rebranded to Ceffu to avoid too much… pic.twitter.com/HoYTfso3ex
— WhaleWire (@WhaleWire) September 20, 2023
This assertion, however, appears contrary to the facts. In a document submitted by the crypto exchange in court, the company clearly states:
"We license wallet custody software and support services from Ceffu."
In light of the evidence provided, we fail to see how CZ can claim that Binance US never employed Ceffu's services.
Either the court filing by the crypto exchange contained a major error, or CZ just outright lied. Meanwhile, the saga continues.
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