SEC accuses Binance CEO of leaving to "block information," questions shared custody institution Ceffu

The lawsuit against Binance has not seen significant progress, with the SEC still searching for evidence that Binance.US is not independent from Binance, questioning the shared custody provider, Ceffu. Lawyers representing Binance have refuted all accusations.

SEC's Departure of Binance Executives Seen as "Blocking Information"

The SEC initially requested Binance to disclose operational documents, especially those related to user asset control. Binance initially agreed but later refused, deeming it an unreasonable request. The SEC criticized Binance for lacking transparency in the investigation process.

During a hearing held by the SEC on the 19th, it was reiterated that Binance refused to cooperate and had blocked information related to potential exposure of asset custody, as indicated in legal documents where the SEC stated:

There continues to be a significant exodus of employees from BAM, the U.S.-based entity of Binance, including the CEO and others who may have key information regarding assets, underscoring the urgency and necessity of disclosing this information.

Binance.US and Ceffu, the Shared Custodian?

Binance initially launched the custodian entity "Binance Custody" in 2021, which was later renamed to "Ceffu" in February this year, a play on words derived from Binance's Secure Asset Fund for Users, SAFU.

The SEC had previously shifted the lawsuit focus to Ceffu because if Binance.US used Ceffu, it would violate the agreement to ensure that only U.S. executives could access Binance.US assets.

SEC and Binance had previously reached a consensus: Binance.US and SEC have an agreement! It is expected to exclude Binance's authority, with only U.S. executives having control over user assets

Ceffu's Sole Shareholder is Changpeng Zhao

However, in a response by Ceffu on September 15th to the SEC, Ceffu stated its commitment to providing digital asset custody solutions for institutional clients, excluding specific jurisdictions like the U.S., and emphasized that Ceffu's operations are entirely independent of BAM.

Yet, a document from the SEC in November last year indicated that Changpeng Zhao CZ is the sole shareholder of Ceffu.

A spokesperson for Ceffu told CoinDesk that Ceffu is a completely independent third-party technology service provider and not a physical entity of Binance, refusing to disclose the current ownership structure of Ceffu.

A judge has ruled for both parties to submit a joint status report by October 10th, with the next hearing scheduled for October 12th.