SEC Investigates Binance.US Over Alleged Non-Cooperation

The US branch of global crypto exchange giant Binance is under the regulatory microscope, as the Securities and Exchange Commission (SEC) accuses Binance.US of non-cooperation in its investigation into potential violations of federal securities laws.

BREAKING: The SEC has filed charges against #Binance US for failure to cooperate with the investigation.

— Breaking Whale (@BreakingWhale) September 15, 2023

In a court filing dated September 14, the SEC asserts that Binance.US’s parent company, BAM, has been less than forthcoming during the discovery process. The regulatory body contends that BAM has only produced a meager 220 documents, many of which are incomprehensible screenshots or documents lacking dates and signatures.

SEC Accusation Centers Around Binance.US’ Use of Ceffu

The SEC’s primary concern centers on Binance.US’s utilization of Ceffu, a custody service facilitated by Binance Holdings Ltd., the international arm of Binance. The SEC alleges that this arrangement might contravene a prior consent order, which stipulated that only US-based personnel should have access to customer funds.

Binance.US has vehemently refuted the SEC’s allegations, staunchly defending its reliance on Ceffu. The company asserts that Ceffu is merely a software provider devoid of any custody or access to customer funds. Moreover, Binance.US has characterized the SEC’s actions as a “futile fishing expedition” and an overreaction to a non-issue.

This regulatory scrutiny adds to Binance’s growing list of challenges. The exchange has been subject to investigations and increased scrutiny in multiple countries regarding its adherence to regulatory and security standards. Notably, Binance.US recently announced a significant downsizing, including the departure of its CEO and chief legal officer.

The outcome of the SEC’s inquiry bears substantial significance, not just for Binance.US but for the broader cryptocurrency industry. The case may serve as a litmus test, challenging the boundaries and definitions of securities laws as they pertain to crypto assets and services.

As this investigation unfolds, the crypto community, Binance.US customers, and industry stakeholders await its resolution with bated breath, acutely aware of the potential ramifications it may have on the future of cryptocurrency regulation in the United States.

 

Try Out Our Trading Bot Services Today. Get Started Here