/arc-photo-coindesk/arc2-prod/public/OGSWVF6C3VEKHGNM2YFB434DDE.png)
In a scathing Monday court filing, the U.S. Securities and Exchange Commission (SEC) urged a D.C. court to approve an inspection into Binance.US, doubling down on previous accusations that the firm had failed to produce documents sought by the regulator in ongoing legal proceedings.
In June, the watchdog sued Binance.US, the exchange’s global parent Binance Holdings and founder Changpeng “CZ” Zhao, alleging they ran an unlicensed securities exchange. The SEC’s findings in the case so far demonstrate “the urgent need for an inspection,” Monday’s filing said, as the regulator restated its worries about Binance’s use of custody platform Ceffu.
NOW
PLAYING
SEC Delays Spot Bitcoin ETF Decision; Creditors…
Justin Sun Buys 5M CRV Tokens to Help Ease Crisis at Curve…
SEC Regulators ‘Running Around Frantically’…
The SEC believes Ceffu, rebranded earlier this year from Binance Custody, may also be serving Binance.US, and therefore being used to shift U.S. customer funds out of the country in violation of a previous agreement to not do so.
The agreement was entered into because Binance.US‘ holding company BAM Trading Services failed to convince the SEC that it controlled its customers’ assets, the filing said, adding that such conclusions were “undermined by BAM’s own documents and inability to keep its story straight, [which] did not actually establish that BAM exercised exclusive control over its customers’ assets.”
“The SEC seeks an order compelling BAM to produce documents and communications concerning any entity providing it wallet custody software and related services,” the filing said, referring to BAM’s “evolving” explanations for Ceffu.
The regulator further accused the company of providing “inconsistent representations about key facts, slow-rolled small productions of documents and information, and stonewalled on entire categories of information that would likely shed light on its shaky assertions concerning the custody of customer assets.”
While calling Zhao “an individual who views himself outside the jurisdiction of any court,” the SEC asked the court to reject Binance’s “half-hearted claims of irrelevance, prejudice, and burden,” and instead compel the exchange to provide the depositions, communications and other information the regulator is requesting.
Meanwhile, Ceffu has said it is a “fully independent third-party technology service provider,” and not a part of Binance, although its ties to the crypto exchange remain somewhat unclear.
A hearing on the case is set to take place later Monday, at 3:00 p.m. EDT.
Story continues below
Recommended for you:
Read more: Binance.US Not Playing Ball With Probe, SEC Says, as Focus Turns to Custody Arm Ceffu
Edited by Nikhilesh De.
Newsletter Every Tuesday
Sign up for State of Crypto, our weekly newsletter examining the intersection of cryptocurrency and government
Enter your Email
By clicking ‘Sign Up’, you agree to receive newsletter from CoinDesk as well as other partner offers and accept our terms of services and privacy policy.
DISCLOSURE
Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Sandali Handagama is CoinDesk’s deputy managing editor for policy and regulations, EMEA. She does not own any crypto.
Credit: Source link
