US SEC Strikes against Ceffu Wallet as Binance-Affiliate in Motion against BAM

UTC by Bhushan Akolkar · 2 min read
US SEC Strikes against Ceffu Wallet as Binance-Affiliate in Motion against BAM
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The US SEC has reaffirmed its claims of undeniable ties between wallet provider Ceffu and Binance in its recent motion against BAM, the parent company of Binance.US.

In its recent motion against BAM, the parent company of Binance.US, the US Securities and Exchange Commission (SEC) has reaffirmed that wallet provider Ceffu has undeniable ties to Binance. These allegations contradict Binance’s prior assertions in court documents.

This redacted filing reiterates the SEC’s position that Binance’s plea for a protective order to shield itself from the SEC’s investigation holds no merit. As a result, the securities regulator has strongly urged the court to reject this request.

Binance had originally submitted this request to the US District Court for the District of Columbia on August 14, characterizing the SEC’s investigation as a “fishing expedition.” In this latest filing, the SEC characterizes Binance’s response to its lawsuit from June as “a labyrinthine maze of distortions.”

In a memorandum filed in the court last week on September 14, the SEC officials raised concerns regarding the Ceffu wallet. The SEC said that Ceffu  “appears to have control of Customer Assets”. The Ceffu wallet is basically the rebranded version of the Binance wallet.

In its filing on Monday, September 18, the US SEC responded to Binance’s alleged resistance to the SEC investigation. The securities regulator noted:

“The limited inspection the SEC has been able to conduct so far demonstrates the urgent need for an inspection. [redacted] The Court should order the inspection the SEC seeks as set forth in its Motion to Compel.”

SEC’s Allegations against BAM

The SEC’s filing on September 18th delineated BAM’s claim that Binance is merely a third-party vendor, providing wallet software services analogous to BAM’s internet service provider. Consequently, according to BAM, it doesn’t have knowledge of Binance’s operational intricacies. Countering this, the US SEC noted:

“Far from being a mere innocuous service provider, however, Binance and BAM are under the common ownership of another Defendant in this action, an individual who views himself outside the jurisdiction of any court.”

The SEC is additionally pursuing depositions from former Binance.US CEO Brian Shroder and Chief Financial Officer Jasmine Lee. Binance.US has argued that their testimony would cause disruptions to BAM’s business. Schroder’s departure, along with substantial layoffs, was reported on September 13.

Binance’s efforts to curtail the SEC’s investigative activities triggered a series of reciprocal court filings. A hearing scheduled for the afternoon of September 18, Washington D.C. time, is expected to resolve this issue.

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