- The dispute highlights the complexity of regulatory supervision in the crypto sector.
- The SEC maintains that Binance has not cooperated with its requirements.
Changpeng Zhao (CZ), CEO of Binance, has responded to the concerns around Ceffu by dismissing reports that Binance’s U.S. branch is affiliated with Ceffu.
Ceffu was originally known as Binance Custody, and the continuing dispute between the United States SEC and Binance-affiliated entities, especially Binance U.S, over their apparent relationship to Ceffu, highlights the complexity of regulatory supervision in the cryptocurrency sector.
“For the record, Binance US does not use, and has NEVER used Ceffu or Binance Custody. You can’t just make this stuff up.”
Ongoing Legal Pursuit
The SEC’s request for further information from BAM (exchange’s U.S. operating company) about the treatment of client assets at Binance.US is at the core of the matter. According to the SEC, there is cause for alarm because Ceffu, which it calls a “newly rebranded Binance Entity,” may be able to access user funds.
BAM, according to the regulatory body, is not allowed to use a “foreign Binance affiliated third-party for wallet custody services” because of a prior consent order.
Binance’s alleged unwillingness to cooperate with the SEC in delivering required information has emerged as a central point of contention in this case. The SEC maintains that Binance has not cooperated with its requirements, while Binance maintains that some of the SEC’s requests are excessively vague or onerous.
The SEC has also called attention to what it sees as discrepancies in Binance’s claims about Ceffu’s role and its connection with the exchange. These discrepancies add further confusion to the mix and call into question the level of openness and regulation that has been implemented.
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