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The US Securities and Exchange Commission (SEC) has been scrutinizing Binance.US and its parent company, Binance, for alleged violations. In June, the SEC sued both entities over the alleged circulation of unregistered securities among 13 charges. More recently, the SEC accused Binance.US of non-cooperation regarding these charges and raised concerns about Ceffu, potentially violating regulations by moving assets overseas.
The SEC also expressed dissatisfaction with the quality and quantity of documents provided by Binance.US during their investigation. They claimed that BAM – Binance.US’ holding name – had supplied “only 220 documents”, many of which were “unintelligible screenshots” and documents “without dates or signatures”.
In response to these allegations, Binance.US filed a statement saying that concerns over Ceffu were “much ado about nothing” and described the SEC’s request for more information as a “futile fishing expedition”.
The company’s recent actions, which include substantial layoffs and selling co-founder Changpeng Zhao’s shares, aim to provide financial stability for at least seven years. A statement from Binance.US read: “The actions we are taking today provide Binance.US with more than seven years of financial runway and enable us to continue to serve our customers while we operate as a crypto-only exchange.”
However, investors are growing increasingly concerned about the potential impact on the broader cryptocurrency market if Binance.US is forced to close. The company plays a significant role in global crypto trading, and its cessation could trigger widespread sell-offs and market anxiety, often referred to as a “supply shock.”
The leadership void left by the recent departures is raising further questions about the company’s ability to navigate these challenges. As regulatory scrutiny intensifies, the loss of high-profile executives who would typically manage such crises is causing speculation about undisclosed issues within Binance.US.
UPDATE: This article has been amended to remove an incorrect reference to Ceffu being a Binance entity. Separately, Ceffu has released a statement regarding the SEC’s allegations.
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