Binance US Accused by SEC of Obstructing Securities Violation Investigation

Binance US Accused by SEC of Obstructing Securities Violation Investigation

The SEC Accuses Binance United States of Non- Participation in Probe

The United States Securities and Exchange Commission (SEC) has accused Binance United States of non- participation 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 likewise been reluctant to present key witnesses for deposition. The SEC has received relevant documents from other sources that BAM claimed did not exist.

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Probable 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 United States clients’ assets.

Binance United States Defends Itself

As a result to the SEC’s apprehensions, Binance United States claimed 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 provides them access or custody over customer funds.

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SEC Lawsuit and Internal Crisis

This latest accusation comes after a lawsuit initiated by the SEC against Binance on June 5. The SEC has charged Binance with numerous violations, including unregistered securities offerings and its staking initiative. In addition, Binance United States is facing an internal crisis with plenty of high-profile departures, including the CEO, head of legal, and chief risk officer.

Hot Take: Binance United States Faces SEC Scrutiny for Alleged Non-Cooperation

The SEC’s accusations against Binance United States for non- participation 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 probable violations of a consent order. Binance United States has defended itself, dismissing the SEC’s concerns as overblown. This accusation comes amidst an existing lawsuit by the SEC against Binance for numerous violations. In addition, Binance United States is dealing with an internal crisis marked by whole lot of departures. The outcome of this investigation will determine future of the Binance United States and its compliance with regulatory requirements.

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