Binance‘s legendary CEO, who is responsible for bringing the volume king of the crypto exchange to these days, has spoken about the recent allegations. The exchange, with its massive user base worldwide, has faced regulatory authorities of many countries as a result of its rapid expansion strategy. The latest is the United States, and the lawsuit is still ongoing.
Statements from Binance CEO
Yesterday, the documents submitted to the court by SEC contained various allegations. The suspicions about the relationship between Binance US and Ceffu were on CZ’s agenda today. The regulatory authority’s allegations were that Binance US, the US branch of Binance, likely used a custody unit that could expose its customers to a foreign organization and that may be connected to its parent company.
CZ strongly denied the allegations a few hours ago and said:
“For the record, Binance US does not use Ceffu or Binance Custody and has NEVER used them. You can’t just make these up.”
Ceffu, Binance, and Binance US
Ceffu has become a significant point of conflict between SEC and Binance. The regulatory authority requested more details on how customer assets from BAM, the company behind Binance US, are handled. The company stated that it considered most of the additional information requests to be too broad or burdensome and that BAM did not comply with them. The possibility of US customers’ assets being stored in the same place as the global exchange became one of SEC’s attack arguments.
After the collapse of FTX, US institutions suddenly realized that they were not regulating the crypto business in the country. Understanding that regulations would take time, institutions are trying to squeeze crypto companies into the narrow framework of existing laws through sanctions instead. However, the existing laws do not specify exactly where, how, in what manner, and through which licensed custodian companies a crypto exchange will hold customer assets.
During a hearing on Monday, a DC district judge requested SEC and BAM to continue to work together and collaborate. SEC and BAM agreed to hold a hearing on October 12 and submit a joint status report by October 10.
At this stage, Binance chose the legal battle instead of suspending its operations in the country. However, the bad news caused Binance US customers to withdraw from the exchange and daily volumes to drop to a few million dollars.
