Binance CEO Maintains Composure Ahead of SEC Hearing
The CEO of Binance, Changpeng Zhao, appeared calm as he shared a cheerful message about the company’s interns on social media. However, he is undoubtedly paying close attention to the ongoing court proceedings between Binance.US and the United States Securities and Exchange Commission (SEC). The SEC has accused Binance of being uncooperative, despite previously agreeing to a consent order on discovery related to allegations of unregistered securities operations.
Custody Concerns for Binance.US Customers
One major concern raised by the SEC is the custody of Binance.US customer assets. The SEC’s Office of Internet Enforcement chief, John Reed Stark, highlighted that Binance acknowledges being legally known as “Bifinity” in its “Terms of Use” page. This suggests that Binance Group is connected to Bifinity, raising concerns that customer assets held by Binance.US may be at risk of being misused or mishandled.
Access Restrictions and Balance Difficulties
Binance.US had previously agreed to restrict access to customer funds only to U.S. staff. However, newly unsealed sections of the complaint filed by the SEC auditor reveal difficulties in accurately determining wallet balances at specific points in time. This raises concerns about whether Binance was fully collateralized during those periods.
Hot Take: SEC vs. Binance — A Growing Battle
The ongoing legal battle between the SEC and Binance continues to intensify. The SEC’s motion to compel highlights their frustration with what they perceive as uncooperative behavior from Binance. As the hearing proceeds, the outcome will have significant implications for both parties involved and may shape future regulatory actions within the crypto industry.
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