Binance.US claims in a new court filing that it has “made significant efforts” to cooperate with a Securities and Exchange Commission investigation since December 2020.
That timeline tracks with the investigative timeline laid out by the SEC last week. But the agency argues that Binance.US has not provided “reassuring” answers regarding where customer assets are stored.
Monday’s filing by Binance.US is the U.S. affiliate’s first pushback to claims by the SEC that it and its parent company redirected over $12 billion in customer assets to funds controlled by owner and founder Changpeng ‘CZ’ Zhao, in an echo of similar allegations raised against Sam Bankman-Fried, FTX, and Alameda Research.
Responding to the SEC’s allegations that it commingles customer assets with funds controlled by Zhao, lawyers representing Binance.US’s parent company, BAM Trading, responded that it “maintains its customers’ fiat currency in segregated accounts maintained with its banking partners, separate from any corporate funds.”
The company acknowledged that Zhao owns BAM Trading’s bank account but claims he does not have signatory authority over the account. The SEC argues that Zhao is one of the people with control over those bank accounts and says it’s proof of a lack of separation between Binance and Binance.US, both of which he’s believed to own a controlling stake in.
The filing pushing back on SEC claims comes in preparation for tomorrow’s hearing on a temporary restraining order on Binance.US requested by the SEC that would effectively freeze the U.S. affiliate’s assets except for customer withdrawals.
The SEC also wants Binance and Binance.US to provide a full accounting of their financial health.
This is a developing story.
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Source: https://www.theblock.co/post/234323/binanceus-responds-to-fraud-market-manipulation-asset-safeguarding-claims?utm_source=rss&utm_medium=rss