SEC alleges Binance.US’s reluctance to disclose information, urges court intervention.

Binance.US, the United States branch of cryptocurrency exchange Binance, is facing scrutiny from the U.S. Securities and Exchange Commission (SEC) over its handling of customer assets and lack of cooperation during an ongoing investigation. The SEC claims that Binance.US, operated by BAM Trading Services, has been unresponsive and unwilling to provide information regarding the custody of customer assets. In a joint status report filed on March 5, the SEC requested the court’s intervention to expedite the discovery process. The investigation centers around whether employees of Binance’s non-U.S. arm had access to Binance.US customer assets. The SEC alleges that Binance.US has failed to prove that it did not have access to private keys or other forms of customer asset access.
In response, Binance.US has refuted the SEC’s allegations, stating that it has complied with all of the regulator’s requests for information. The exchange argues that the SEC’s claims regarding customer assets are baseless and asserts that it has gone above and beyond its obligations to cooperate with the securities watchdog. Binance.US claims to have provided extensive documentation, including sworn declarations, monthly reports, and facilitated inspections of shared custody devices involving customer assets.
The SEC initially sued Binance, Binance.US, and the exchange’s founder Changpeng “CZ” Zhao in June 2020, accusing them of selling unregistered securities and commingling customer assets. In November 2020, Binance reached a $4.3 billion settlement with the U.S. Department of Justice, admitting to violating money laundering and terrorism financing laws. As part of the settlement, Zhao pleaded guilty to money laundering charges and awaits his sentencing hearing on April 3, where he could face up to 18 months in prison.