CZ’s X Post on Ceffu and Binance.US Counters SEC Allegations, Deepening Regulatory Confusion

Following a recent court hearing on September 18, where a judge denied the United States Securities and Exchange Commission (SEC) unrestricted access to Binance.US software, Changpeng Zhao (CZ), CEO of Binance, took to X (formerly Twitter) to address a specific point of contention with the SEC.

In a statement made on September 19, CZ clarified, “For the record, Binance US does not use, and has NEVER used Ceffu or Binance Custody. You can’t just make this stuff up.” Despite CZ’s statement, the situation remained far from clear.

The SEC’s concerns revolve around the role of Ceffu within the Binance.US ecosystem, especially given that Binance.US had agreed to comply with the SEC’s consent order from June 17. This order explicitly stated that “U.S.-based personnel for BAM Trading and BAM Management will have complete control over Customer Fiat Assets and Customer Crypto Assets.” BAM is the holding company for Binance.US. An earlier Bloomberg report from May, based on a 2022 corporate filing, had indicated that CZ, who is not U.S.-based, owned the company operating Ceffu.

On September 15, Ceffu published a statement on its website, disputing the SEC’s claim in a September 14 court filing, which had linked Ceffu to Binance.US. Ceffu clarified that it provides services “in select jurisdictions, excluding the United States, among others.”

However, a confidential document submitted to the court on September 15 by Binance.US, titled “Binance.US Digital Asset & Custody Operations Policy,” revealed that the majority of their wallet technology was licensed from Ceffu, formerly known as Binance Custody. Binance had introduced Binance Custody in 2021, and Ceffu underwent a rebranding. In March, a spokesperson from Binance had informed that Ceffu was their “independent institutional custody partner.”

In its September 18 court filing, the SEC referred to Ceffu as a “mysterious Binance-related entity” and highlighted Binance.US’s inconsistent descriptions of its relationship with Ceffu when dealing with the agency. The SEC suggested that BAM may still not fully comprehend the nature of Ceffu. The situation remains complex and raises questions about the exact nature of this relationship amid ongoing regulatory scrutiny.

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