SEC claims Ceffu wallet provider is ‘Binance-related’ in motion against BAM

The securities regulator claims that Ceffu is a Binance entity and not merely a digital asset wallet provider.

In its latest filing regarding its motion to compel against BAM, the holding company for Binance.US, the United States Securities and Exchange Commission (SEC) has claimed that wallet provider Ceffu is indeed “Binance-related.” This is in contradiction to claims made by Binance in earlier court documents.

The redacted filing argues again that Binance’s request for a protective order against the SEC investigation is meritless. It calls for the court to deny that request. Binance made the request in the U.S. District Court for the District of Columbia on Aug. 14, calling the SEC investigation a “fishing expedition.” In its latest filing, the SEC called Binance’s response to its June suit “a house of mirrors.”

The SEC’s Sept. 18 reply filing. Source: CourtListener

The SEC raised questions about Ceffu in a memorandum filed in the court on Sept. 14, saying the company, which was rebranded from Binance in March, “appears to have control of Customer Assets.” 

In response to Binance’s alleged resistance to the SEC investigation, the agency wrote in the Sept. 18 filing:

“The limited inspection the SEC has been able to conduct so far demonstrates the urgent need for an inspection. [redacted] The Court should order the inspection the SEC seeks as set forth in its Motion to Compel.”

The SEC’s Sept. 18 filing outlined that BAM has asserted that Binance is “a mere third-party vendor whose wallet software services are akin to BAM’s internet service provider,” and so it cannot be expected to know how it operates. The SEC countered:

“Far from being a mere innocuous service provider, however, Binance and BAM are under the common ownership of another Defendant in this action, an individual who views himself outside the jurisdiction of any court.”

The individual referenced is transparently Binance CEO Changing Zhao. 

The SEC is also seeking depositions from former Binance.US CEO Brian Shroder and chief financial officer Jasmine Lee. Binance.US has countered that their testimony would be “disruptive to BAM’s business.” Schroder’s departure was reported on Sept. 13, along with extensive layoffs.

Binance’s attempt to get the court to rein in SEC investigative efforts set off back-and-forth court filings. A hearing on the afternoon of Sept. 18, in local Washington D.C. time, is likely to settle the matter. 

This is a developing story, and further information will be added as it becomes available.

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