The SEC and Binance.US Engage in Legal Battle Over Customer Asset Custody
The U.S. Securities and Exchange Commission (SEC) and Binance.US are currently involved in a legal dispute regarding the handling and custody of customer assets. The SEC claims that a mysterious entity called “Ceffu” is a newly rebranded Binance entity involved in customer asset custody. However, Binance CEO Changpeng Zhao denies these allegations, stating that Binance US does not use Ceffu or Binance Custody. The SEC has requested more information on how Binance.US handles customer assets, but BAM, the operator of Binance.US, has resisted this request as being too burdensome.
The SEC insists on transparency regarding Ceffu and emphasizes that BAM is not allowed to use a foreign Binance affiliated third-party for wallet custody services. A lawyer for the SEC highlighted BAM’s inconsistent statements about Ceffu’s involvement. A D.C. district judge has urged both parties to resolve their differences amicably before the Oct. 12 hearing and submit a joint status report by Oct. 10.
Future Implications for Binance.US and U.S. Crypto Exchanges
The pending hearing and joint status report will likely have significant implications for the regulatory environment of Binance.US and other cryptocurrency exchanges operating in the U.S. This legal battle is part of the SEC’s broader efforts to regulate crypto exchanges and ensure compliance with federal securities laws.
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