Changpeng Zhao refutes SEC claims against Binance.US

Binance chief Changpeng Zhao (CZ) said that the exchange’s American arm has never used the custodial service Ceffu, which was formerly known as Binance Custody, contrary to claims by the SEC.

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

“You can’t just make this stuff up,” CZ told the regulator.

On September 18, the SEC подала in court an amended document against the protective motion of the crypto exchange, in which it again raised questions about Ceffu. The agency suspects the platform of “possible control” of Binance.US client assets, which violates earlier agreements.

“The limited investigation the SEC has managed to conduct so far demonstrates the urgent need for a review. The court should order an examination,” the appeal says.

The regulator also accuses Binance.US in failing to cooperate in providing information. According to the agency, the exchange’s holding company BAM delayed the preparation of the requested documents.

The court refused to compel the American unit of Binance to provide the SEC with expanded information regarding the handling of client assets. In the company itself, regulator’s requests were described as “too broad” and “unduly burdensome.”

According to the Commission’s testimony, BAM asserted that Binance is “a simple third-party provider whose wallet software is akin to an Internet service provider.”

“However, Binance and BAM are far from merely benign service providers, as they are jointly owned with another defendant in this suit, a person who considers themselves outside the jurisdiction of any court,” the SEC stressed, probably referring to CZ.

The regulator also seeks testimony from former Binance.US CEO Brian Shroder and other top executives. Binance.US objected, saying their testimony would harm BAM’s business.

News of Shroder became known on September 13. Following him, the company left the chief legal officer Krishna Juvvadi and the head of risk Sidney Majali left.

In September the daily trading volume on the platform fell to $2.97 million. For example, on September 16 the figure was $5.1 million versus $230 million a year ago.

Back in June, the SEC filed suit against Binance and Changpeng Zhao, accusing them of 13 counts, including the sale of unregistered securities.