Fresh accusations have emerged in the ongoing tango between crypto titan Binance and the Securities and Exchange Commission (SEC). Binance.US, the American arm of the global exchange, finds itself under the microscope. The SEC questions whether Binance.US could potentially expose its users to overseas business vulnerabilities via an alleged affiliated custody unit.
Changpeng “CZ” Zhao, the outspoken CEO of Binance, was swift in his rebuttal. On a trending social platform, which recently outpaced Twitter in user engagement, Zhao denied any affiliation between Binance US and the entities ‘Ceffu’ and Binance Custody. His assertive stance: “You can’t just make this stuff up.”
But the SEC remains unswayed. Their probe centers on ‘Ceffu’, viewed by them as a “freshly minted Binance extension” overseeing client assets. Per the latest agreement terms, Binance’s US entity, BAM, shouldn’t harness any “overseas Binance linked entity for its wallet custody functionalities.” The regulatory watchdog’s attention remains unwavering on the security of Binance.US user funds.
Court revelations add another layer. BAM uses wallet custody tech crafted by Binance Holdings Limited. Interestingly, BAM dubbed this tech ‘Ceffu’ in their dialogues with the SEC. BAM insists it’s an informal label pending a formal software name. Their legal representatives back this, terming it a nomenclature error linked to the nameless software.
Yet, the SEC remains skeptical, citing fluctuating narratives about ‘Ceffu’ and the depth of Binance’s engagement.
A recent courtroom episode in Washington, DC saw judicial eagerness for clarity. The overseeing magistrate nudged the SEC and BAM towards a consensus, alluding to the necessity of cooling the escalating tension. This isn’t Binance’s debut dance with the SEC. Earlier confrontations in June saw the exchange and Zhao in the regulatory spotlight, facing hefty allegations of potentially flouting several federal securities regulations.