Binance CEO Changpeng Zhao refutes the SEC's claims of using the custody service Ceffu at Binance.US
Date: 2023-09-19 Author: Dima Zakharov Categories: IN WORLD
Conflict Between Binance.US and SEC: Refutation of Allegations and New Regulator Demands
In the ongoing battle between regulators and major cryptocurrency exchanges, Binance CEO Changpeng Zhao (CZ) has officially refuted the claims made by the U.S. Securities and Exchange Commission (SEC) regarding the use of the custody service Ceffu by Binance.US, formerly known as Binance Custody.
The primary argument put forth by the SEC revolves around suspicions that Binance.US may have been managing client assets, potentially violating prior agreements and norms. Based on limited data available to the regulator, the SEC insists that a more thorough investigation and expertise are required to uncover the facts.
Nevertheless, Changpeng Zhao maintains that Binance.US has never used Ceffu or Binance Custody and dismisses the regulator's allegations as unfounded. This conflict between the exchange and the SEC continues, with the resolution of all issues expected to take some time.
Legal Proceedings and Expectations in Resolving the Conflict Between Binance.US and the SEC
However, the court has refused to compel Binance's U.S. subsidiary to provide the SEC with additional information concerning the handling of client assets, deeming the regulator's requests overly broad and burdensome. This denial only exacerbates the tension between the parties.
This incident is just one of many problems that Binance has encountered in its dealings with regulators. Previously, the SEC had filed 13 charges against Binance and Changpeng Zhao, including allegations of selling unregistered securities.
Given the pressure from regulators and legal difficulties, Binance, one of the world's largest cryptocurrency exchanges, finds itself in a challenging position. This incident could also impact the restoration of trust among users and investors in the exchange.
In addition to resolving the conflict between Binance.US and the SEC, it's worth noting that former CEO of Binance.US, Brian Shroder, as well as other top executives called upon to provide testimony, have become subjects of interest to the regulator. The SEC is seeking testimony from them as part of its investigation.
Impact of the Conflict on Binance's Position and Future Prospects
Interestingly, Shroder left his position at Binance.US shortly after the legal proceedings with the SEC began. His departure, along with subsequent dismissals of other high-ranking employees, including heads of the legal and risk departments, signifies increased uncertainty within the company.
Nonetheless, Binance.US continues to actively operate in the American cryptocurrency market, despite heightened legal complexities and regulatory pressure. The daily trading volume on the Binance.US platform has fluctuated on some days, potentially linked to the deteriorating situation, but it remains a significant player in the American cryptocurrency market.
