Wed. Sep 27th, 2023
    The SEC Urges Court to Approve Inspection of Binance.US

    The U.S. Securities and Exchange Commission (SEC) has filed a court document urging a D.C. court to grant an inspection into Binance.US. This comes as the SEC continues its legal proceedings against the exchange, accusing it of running an unlicensed securities exchange. The regulator emphasized the urgent need for an inspection, citing concerns over Binance’s use of the custody platform Ceffu.

    The SEC alleges that Ceffu, formerly known as Binance Custody, may be serving Binance.US and potentially helping to move U.S. customer funds out of the country, which would violate a prior agreement. The agreement was made due to BAM Trading Services, the holding company of Binance.US, failing to convince the SEC that it had control over its customers’ assets.

    In its filing, the SEC criticized BAM Trading Services for providing inconsistent explanations about Ceffu and for withholding crucial information related to the custody of customer assets. The regulator requested an order to compel BAM to produce documents and communications regarding any entity providing wallet custody software and related services.

    The SEC also called out Binance founder Changpeng “CZ” Zhao, stating that he sees himself as being beyond the influence of any court. The regulator urged the court to dismiss Binance’s claims of irrelevance, prejudice, and burden, and instead compel the exchange to provide the necessary depositions, communications, and information requested by the SEC.

    Ceffu, on the other hand, maintains that it is a fully independent third-party technology service provider and not directly associated with Binance, although their relationship remains somewhat unclear.

    A hearing regarding the case is scheduled to take place later today.

    – Original article: [source]
    – SEC: U.S. Securities and Exchange Commission
    – Binance.US: Binance.US Not Playing Ball With Probe, SEC Says, as Focus Turns to Custody Arm Ceffu