SEC Accuses Binance.US of Non-Cooperation in Investigation

SEC Escalates Battle with Binance.US

Binance.US, the American arm of the global cryptocurrency exchange Binance, faces allegations of non-cooperation with the U.S. Securities and Exchange Commission (SEC) in an ongoing investigation. The SEC has unsealed court filings on Sept. 14, asserting that Binance.US's staking, clearing, and brokerage services violate federal securities laws.

The Federal regulators are particularly concerned about Binance.US's use of Ceffu, a custody service offered by Binance's international branch. This usage raises concerns about assets being moved overseas, potentially contravening a previous agreement to prevent such actions.

The SEC has voiced frustration over the evidence-gathering process, known as discovery, stating that Binance.US's holding company, BAM, has provided only around 220 documents. Many of these documents are described as unintelligible screenshots and lack essential dates or signatures.

‍

Binance.US's Defense

Binance.US has countered the SEC's concerns regarding Ceffu, dismissing them as baseless. The company argues that simply providing wallets as part of the Ceffu software does not grant its international arm control or access to customer funds. Binance.US described the SEC's demands for additional documents as a "futile fishing expedition" in a previous filing on September 12.

The SEC initially filed a lawsuit against Binance on June 5, levying 13 charges against the cryptocurrency exchange. These charges included unregistered securities offerings, allegations related to the Simple Earn and BNB Vault products, and the staking program.

The SEC asserted that Binance.com, Binance.US, and BAM Trading should have registered as clearing agencies, broker-dealers, and exchanges. Additionally, the unregistered sale of Binance.US's staking-as-a-service program required BAM Trading to register as a broker-dealer.

These recent SEC accusations come amidst internal turmoil at Binance.US. CEO Brian Shorder has joined a growing list of high-ranking Binance executives departing from the firm this year. This departure was followed by the resignations of the head of legal and the exchange's chief risk officer within days.