Following a judge’s decision to deny the United States Securities and Exchange Commission (SEC) unrestricted access to Binance.US software during a September 18 hearing, Binance CEO Changpeng Zhao (CZ) addressed one of the SEC’s key points of contention on social media platform X (formerly Twitter).
In a September 19 post, CZ stated, “For the record. Binance US does not use, and have NEVER used Ceffu or Binance Custody. You can’t just make this stuff up.” However, CZ’s statement did little to clarify the situation.
Ceffu’s Role in Question
The SEC has expressed concerns about the role of Ceffu within the Binance.US ecosystem, as Binance.US had previously agreed to the SEC’s consent order on June 17, which stipulated that U.S.-based personnel for BAM Trading and BAM Management would have full control over customer assets.
BAM, the holding company for Binance.US, was reportedly not U.S.-based. A May 2022 corporate filing indicated that Ceffu, the company in question, was owned by CZ, who is also not U.S.-based. Ceffu disputed the SEC’s claim of its connection to Binance.US in a September 15 statement, clarifying that it operates in specific jurisdictions, excluding the United States.
Confidential Document Raises Questions
However, a confidential document submitted to the court on September 15, titled “Binance.US Digital Asset & Custody Operations Policy,” revealed that Binance.US licensed wallet custody software and support services from Ceffu, which had been previously known as Binance Holdings Limited. This document contradicted CZ’s statement.
The SEC, in its September 18 court filing, referred to Ceffu as a “mysterious Binance-related entity” and highlighted inconsistencies in Binance.US’s descriptions of its relationship with Ceffu in dealings with the agency. The SEC questioned whether BAM truly comprehended the nature of Ceffu’s involvement. The situation remains complex and raises questions about the nature of Ceffu’s connection to Binance.US and the ongoing regulatory scrutiny facing the cryptocurrency exchange.