In court filings unsealed Tuesday, the Securities and Exchange Commission (SEC) has accused Binance.US of non-cooperation in the probe that the company’s staking, clearing, and brokerage services are in violation of federal securities law.
Federal regulators in the United States are expressing concerns over Binance.US’s use of Ceffu, a custody service offered by Binance’s international arm. They believe that this utilization infringes upon a previous agreement designed to prevent assets from being moved offshore.
The SEC alleges that Binance.US’s holding company, BAM, has been uncooperative in providing evidence, stating that they have produced only around 220 documents, many of which consist of unintelligible screenshots and documents lacking dates or signatures. The SEC’s document, which seems to be a partially unsealed version of one filed in August, suggests that the limited evidence provided raises questions about whether the defendants are violating the consent order. The consent order was established earlier to ensure that only local U.S. staff have access to customer funds, news reports said.
The SEC’s primary concern is centered on Binance.US’s use of Ceffu, a wallet custody software offered by Binance Holdings Ltd’s international entity. This situation raises worries that other entities within Changpeng “CZ” Zhao’s empire could potentially control U.S. customer assets.
Amid these legal challenges, Binance.US announced this week that it has downsized its workforce by one-third, including the departure of Chief Executive Officer Brian Shroder. Reportedly, other departing staff members include the company’s head of legal and chief risk officer.