Binance CEO CZ was quick to respond to the SEC’s controversial claims. “You can’t just make these up,” CZ said while sharing on social media. He complained with the following statements.
“You can’t just make it up”
Binance CEO Changpeng Zhao has denied Securities and Exchange Commission allegations that Binance.US uses a custodian affiliated with its parent company that could expose customers to a foreign entity.
“Binance US does not use Cefu or Binance Custody and has never used it,” CZ shared on his social media account. “You can’t just make these.” He said.
What happened?
Cefu has been a point of contention between the SEC and Binance, with the regulator asking for more information from BAM, the company behind Binance.US, about how client assets are managed on Binance.US. The company described most of the requests for more information as too broad or burdensome and said BAM had failed to comply.
The SEC specifically requested more information about Cefu, which the agency said is a “newly rebranded Binance entity” that appears to control customer assets. The agency also said that BAM was not allowed to use “foreign Binance-affiliated third parties for wallet custody services” under the consent order.
A lawyer for the SEC emphasized that BAM had made “inconsistent statements regarding the involvement of Seifu and Binance.”
In a court filing last week, BAM said it relies on wallet custody software developed by Binance Holdings Ltd. to protect the wallets that hold the majority of customers’ assets.
“Accordingly, when BAM learned that BHL planned to market the software commercially under the name ‘Sefu’, it adopted that name as a short reference to the software, including in correspondence with the SEC ,” BAM’s Sept. 12 court filing said. He used the following expressions:
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