The SEC Accuses Binance US of Non-Cooperation in Probe
The U.S. Securities and Exchange Commission (SEC) has accused Binance US of non-cooperation in a probe into alleged federal securities law violations. The SEC is concerned about the use of Ceffu, a custody service provided by Binance’s international arm, which they believe violates a previous agreement prohibiting the transfer of assets abroad. During the discovery phase, Binance US’s holding company, BAM, has been uncooperative, providing only around 220 documents that are undated, unsigned, or incomprehensible screenshots. They have also been reluctant to present key witnesses for deposition. The SEC has received relevant documents from other sources that BAM claimed did not exist.
Potential Violations of Consent Order
Due to the limited disclosure, there are suspicions that BAM may have violated the consent order that restricts access to funds to only US-based personnel. The SEC is particularly concerned about the use of Ceffu, a wallet custody software provided by Binance Holdings Ltd. This raises questions about other factions within Binance’s network having control over US clients’ assets.
Binance US Defends Itself
In response to the SEC’s apprehensions, Binance US argued that the concerns regarding Ceffu are exaggerated and referred to the request for additional documents as a “pointless fishing expedition.” They stated that being a provider of the Ceffu software does not grant them access or custody over customer funds.
SEC Lawsuit and Internal Crisis
This latest accusation follows a lawsuit initiated by the SEC against Binance on June 5. The SEC has charged Binance with various violations, including unregistered securities offerings and its staking initiative. Additionally, Binance US is facing an internal crisis with several high-profile departures, including the CEO, head of legal, and chief risk officer.
Hot Take: Binance US Faces SEC Scrutiny for Alleged Non-Cooperation
The SEC’s accusations against Binance US for non-cooperation in a probe into federal securities law violations have raised concerns about the use of Ceffu, a custody service provided by Binance’s international arm. The limited disclosure and reluctance to present key witnesses have led to suspicions of potential violations of a consent order. Binance US has defended itself, dismissing the SEC’s concerns as overblown. This accusation comes amidst an existing lawsuit by the SEC against Binance for various violations. Additionally, Binance US is dealing with an internal crisis marked by significant departures. The outcome of this investigation will determine the future of Binance US and its compliance with regulatory requirements.
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