In a recent court document, the Securities and Exchange Commission (SEC) accused Binance CEO Changpeng ‘CZ’ Zhao and Guangying ‘Helina’ Chen of receiving billions of dollars in customer funds through their holding company.
According to the SEC, the funds were funneled to Zhao’s companies via an intermediary holding company called Key Vision Development Limited.
Sachin Verma, an accountant employed by the SEC, provided testimony and evidence supporting the allegations. The SEC plans to use this information to seek a temporary restraining order and freeze assets on Binance.US.
The court filing revealed that $12 billion was sent to Zhao, while $162 million was transferred to a company controlled by Guangying Chen in Singapore.
Interestingly, the SEC found that Chen and Zhao controlled several companies unrelated to Binance, raising suspicions about the flow of funds. The majority of the funds sent to them are now reportedly held in offshore accounts.
Chen, who serves as Binance’s back office and financial manager, was found to have controlled accounts belonging to Binance.US, contradicting the unit’s claimed independence.
Binance has vehemently denied commingling customer deposits and company funds, asserting that Merit Peak is solely CZ’s vehicle for trading his personal wealth. However, the SEC alleges that Binance held custody of its U.S. affiliate’s assets until December 2022, despite claiming separation.
The SEC has been investigating Binance.US since 2020, and this latest revelation adds weight to their concerns. The regulator’s efforts to shed light on the alleged mismanagement of customer funds continue to unfold.