Binance.US Clashes with SEC in Ongoing Probe: Denies Use of Ceffu

Changpeng "CZ" Zhao, the CEO and Co-Founder of Binance has refuted claims that Binance.US utilized custody software provided by its international counterpart, Binance Holdings Ltd (BHL), which was later rebranded as Ceffu.

This denial has put CZ at odds with prior statements made by lawyers representing Binance.US in an ongoing investigation by the SEC. The SEC is currently embroiled in a probe focused on ensuring that assets held by the U.S. branch of Binance do not find their way overseas.

In a post on X (formerly Twitter), CZ firmly asserted, "For the record, Binance.US does not use, and have NEVER used Ceffu or Binance Custody." This statement contradicts the narrative put forth by Binance.US's legal team, who had previously acknowledged the use of custody software provided by BHL and marketed as Ceffu, according to a report by Coindesk.

For the record. Binance US does not use, and have NEVER used Ceffu or Binance Custody.You can't just make this stuff up. 🤷‍♂️ https://t.co/JIkIVTf8tc

Binance.US’ Legal Troubles Intensify

BAM had maintained that they relied on wallet custody software developed by BHL to manage their customers' digital assets. In an attempt to clarify their position, Binance.US even adopted the name "Ceffu" as a shorthand reference for the software when corresponding with the SEC.

However, the SEC has presented documents that appear to challenge CZ's claims. While Ceffu has publicly denied providing services to Binance.US and even claimed not to operate in the United States, the SEC's filings suggest otherwise. A screenshot of the Ceffu website on August 3 indicates that Ireland-based Binance Institutional Holdings Limited controlled the custodian's trademarks and data. Additionally, it mentions a Singaporean entity, Binance Institutional SG Pte, as one of its operating arms that support services from Ceffu.

The legal battle between the SEC and Binance.US took a new turn this week when the SEC sought an extensive investigation into the cryptocurrency exchange's asset custody services. The SEC followed allegations of evasive responses and shifting narratives by Binance.US. This development revolves around a protective order sought by Binance.US in response to what it called a "fishing expedition".

SEC's Legal Battle against Binance.US

The SEC's legal action against Binance.US began in June when the regulatory authority filed a lawsuit targeting Binance.US, its parent company, Binance Holdings, and CZ. The central allegation revolved around operating an unlicensed securities exchange, raising significant concerns regarding investor protection and adherence to regulatory guidelines.

The SEC has expressed suspicions that Ceffu may have been utilized by Binance.US to potentially transfer U.S. customer funds beyond national borders. The SEC's filing stated: "The SEC seeks an order compelling BAM to produce documents and communications concerning any entity providing it wallet custody software and related services."

In response, Binance.US has mounted a strong defense. On September 12, the exchange's legal team submitted sealed documents, labeling many of the SEC's demands as "unreasonable" and "excessively burdensome."