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The filing by the SEC cites Binance’s operations in Malta with CZ noting that he won’t have to appear in person.
As per the lawsuit filed by the US Securities and Exchange Commission (SEC), Binance chief Changpeng Zhao has been summoned to Malta. The SEC has accused the exchange of indulging in shady activities in Malta between 2018 and 2019.
Binance chief Zhao cleared the air stating that he won’t need to appear in person to address the summons. “I was told this is just part of the SEC-compliant process. Nothing new. Also told I won’t have to appear in person. No need to FUD,” he wrote.
The SEC filed the summons on Wednesday in the US District Court for the District of Columbia. However, this is just procedural and nothing special.
Earlier this week, the US SEC slapped a lawsuit on Binance on the count of 13 different charges involving misleading investors, operating as an unregistered broker/trader, and much more. Binance arrived in Malta in March 2018 and in October of the same year, Malta passed a law allowing crypto companies to apply for licenses to operate there.
From October 2018 to October 2019, Binance operated in Malta. During this time, crypto companies that moved to Malta had a year to seek authorization and comply with regulations. During that period, Binance and others were not required to seek authorization or follow anti-money laundering laws.
The recent court filing by the SEC reveals Binance’s preference for weak regulations in Malta, which was promoting itself as a blockchain-friendly destination. The upcoming trial will likely put light on Binance’s questionable activities in Malta, particularly concerning US investors and institutions.
Binance’s Partnership with Signature Bank
The fresh filing by the SEC on Wednesday, June 7, also points out the money trail showing that nearly Binance moved nearly $70 billion through its accounts at now-bankrupt Silvergate Bank and Signature Bank. This total amount moved happened in the period from 2019 until earlier this year.
The SEC filing shows that Silvergate Bank facilitated over $50 billion for Binance and affiliated companies. similarly, Signature Bank facilitated over $19 billion. Citing records of Binance’s bank statements, deposits, wire transfers and canceled checks, the SEC filing shows that some of the funds also flew out to foreign entities.
The filing noted: “At times the amounts being credited and debited during a single month amounts to movement of more than a billion dollars. For example, in July 2021, one Signature Bank Binance Holdings account shows a starting balance of $468 million, deposits of $1 billion, withdrawals of $1.3 billion, and an ending balance of $179 million.”