Outside Source
The U.S. Securities and Exchange Commission (SEC) and Binance.US, operated by BAM, are embroiled in a legal dispute concerning the handling and custody of customer assets, with both parties scheduled for a crucial hearing on Oct. 12.
At the heart of the conflict is a mysterious entity known as “Ceffu,” which the SEC argues is a “newly rebranded Binance Entity” implicated in the custody of customer assets. However, Changpeng “CZ” Zhao, CEO of Binance, sharply refuted these claims, stating, “For the record. Binance US does not use, and have NEVER used Ceffu or Binance Custody. You can’t just make this stuff up.”
The SEC’s engagement with BAM is part of its broader effort to regulate crypto exchanges and ensure compliance with federal securities laws. The commission has specifically asked for more information on how Binance.US handles its customer assets, a request which BAM has resisted on grounds that it is “too broad or burdensome.”
While the SEC is insisting on transparency around Ceffu, it also emphasizes that BAM is “not allowed to use a foreign Binance affiliated third-party for wallet custody services,” according to a consent order.
A lawyer for the SEC pointed out that BAM has made “inconsistent statements about Ceffu’s and Binance’s involvement,” further heating the regulatory landscape for the exchange.
This escalating dispute recently caught the attention of a D.C. district judge, who asked both parties to “turn down the temperature” during a Monday hearing. He proposed that both parties work collaboratively toward resolving their differences ahead of an Oct. 12 hearing. Additionally, the judge instructed them to submit a joint status report by Oct. 10.
The SEC initially sued Binance and Zhao back in June for allegedly “violating multiple federal securities laws” and misrepresenting the oversight of the Binance.US platform.
The pending hearing and forthcoming joint status report will potentially serve as pivotal moments that could shape the future regulatory environment for Binance.US, as well as other cryptocurrency exchanges operating within the U.S.
This article first appeared at crypto.news
