Court Filing Alleges Binance Violations of SEC Securities Laws Through Overseas Asset Transportation
Crypto News – A recent court filing by the Securities and Exchange Commission (SEC) accuses Binance of violating federal securities laws by transferring assets outside the United States. The SEC argues that Binance’s reliance on its custody partner, Ceffu, breaches the SEC’s requirements regarding restrictions on the platform’s foreign transactions.
Earlier this year, the SEC charged Binance with illegal intervention by Binance CEO Changpeng Zhao in the operations of Binance US, claiming that both the company and Zhao misled customers. The regulators had already imposed restrictions on moving the company’s assets abroad.
In a prior submission by Binance US, formerly known as BAM Trading and affiliated with the US, the platform emphasized that they have provided “verified accounting” to demonstrate the safety of all customer funds. They also argued that they clarified the SEC’s inquiries by presenting an extensive 5000-page documentary discovery.
The platform stated that in compliance with the Consent Order, BAM confirmed in writing that they would retain custody and control of their customers’ assets throughout the case, refraining from transferring any assets to Binance Holdings Limited (“BHL”), Changpeng Zhao, or their affiliates. They affirmed that they would exclusively manage all Private and Administrative Keys related to customer assets through personnel in the United States.
In the recent filing, the SEC claimed that Binance, by utilizing Ceffu, a wallet custody software from Binance’s international branch, is recommencing its international trade. The allegations encompassed violations of securities laws through the platform’s staking and brokerage services.
The regulators also highlighted the insufficient information provided by BAM Trading. According to the accusations, despite nearly 220 documents being submitted, most of them were “unintelligible screenshots and documents lacking dates or signatures.” The statement expressed concerns that the limited discovery provided by BAM raises questions about whether the defendants are breaching the consent order.