Key Insights
- Changpeng “CZ” Zhao denies that Binance.US used Ceffu, contradicting previous claims in legal filings.
- The U.S. SEC is investigating Binance Custody (rebranded as Ceffu) and seeking assurances that Binance.US assets won’t be transferred abroad.
- Discrepancies persist between CZ’s denial and Binance.US’s statements.
Amidst an ongoing Securities and Exchange Commission (SEC) probe, Changpeng “CZ” Zhao, the brains behind the global crypto exchange giant Binance, vehemently denied allegations that Binance’s U.S. arm utilized custody software from its international counterpart.
This sharp contradiction follows previous statements made by Binance.US in legal filings.
Binance Custody rebranded as Ceffu under scrutiny
At the heart of the SEC’s investigation is Binance Custody, a wallet service that was later rebranded as Ceffu. The regulatory is seeking assurances that assets held by Binance’s U.S. exchange won’t mysteriously find their way overseas.
CZ, who serves as Binance’s founder and chief executive officer, took to social media platform X (formerly Twitter) to set the record straight, asserting, “For the record, Binance.US does not use, and have NEVER used Ceffu or Binance Custody.”
This declaration came just one day after the SEC and Binance.US faced off in a Washington, D.C. courtroom over the matter.
For the record. Binance US does not use, and have NEVER used Ceffu or Binance Custody.
You can't just make this stuff up. 🤷♂️ https://t.co/JIkIVTf8tc
— CZ 🔶 Binance (@cz_binance) September 19, 2023
Clarity amid contradictions
CZ’s assertion sharply contradicts earlier statements put forth by Binance.US, known as BAM in court documents. Lawyers for the U.S. exchange claimed that Binance.US indeed relied on custody software provided by the international arm, Binance Holdings Ltd (BHL), a program later marketed as Ceffu.
According to a September 12 court filing by Binance.US, BAM “relies on wallet custody software developed by BHL to maintain the digital asset wallets that hold much of its customers’ assets.” The filing further indicated that when the company learned of BHL’s plans to commercialize the software under the name ‘Ceffu,’ they adopted this name as a shorthand reference, even using it in correspondence with the SEC.
However, BAM never suggested that it licensed software from any entity other than BHL, maintaining clarity in its communications with the SEC and court submissions.
Adding another layer of complexity, an SEC filing references Binance.US’ Digital Asset and Custody Operations Policy, wherein the U.S. firm explicitly states that it licensed custody software and support services from Ceffu, a company previously associated with BHL. This discrepancy further deepens the confusion.
![Changpeng "CZ" Zhao denies that Binance.US used Ceffu](https://marketsxplora.com/wp-content/uploads/2023/09/BINANCE-US.png)
Read also! SEC Accuses Binance.US of Non-Cooperation in Staking and Custody Probe
Ceffu’s role
Meanwhile, Ceffu, which underwent a rebranding from Binance Custody in February, issued a denial last week, asserting it had not provided services to Binance.US and had no operations in the United States. Yet, the exact nature of Ceffu’s relationship with Binance remains a cloudy and enigmatic territory.
Notably, a screenshot taken on August 3 of the Ceffu website, uncovered and published by the SEC, hints at the control of the custodian’s trademarks and data by Ireland-based Binance Institutional Holdings Limited. The screenshot also alludes to the existence of a Singaporean entity named Binance Institutional SG Pte as one of its operating arms. Intriguingly, references to Binance appeared to have been scrubbed from the website in an update on August 8.
Requests for clarification sent to Binance.US and CZ regarding these conflicting narratives have, so far, gone unanswered, leaving stakeholders in the cryptocurrency world and the SEC equally puzzled and seeking clarity in this cryptic saga.
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