The U.S. Securities and Exchange Commission (SEC) has raised significant concerns regarding Binance.US’s adherence to federal regulations and the reliability of its custody service, Ceffu. In a recently unsealed court document, the SEC accused Binance.US of insufficient cooperation in an ongoing investigation. According to the SEC, Binance.US’s staking, clearing, and brokerage services are in breach of federal securities laws.
Binance.US has downplayed the SEC’s apprehensions, characterizing them as a fruitless fishing expedition. The exchange asserts that customer assets are secure and accuses regulators of an excessive show of force. They argue that the mere act of creating wallets as a provider of Ceffu software doesn’t grant their international division direct access to or control over customer assets.
The SEC has expressed dissatisfaction with the limited information provided by Binance.US’s parent company, BAM. Of the approximately 220 documents submitted, many were purportedly indecipherable screenshots or lacked proper dates and signatures.
Binance.US finds itself entangled in the scrutiny of multiple regulatory bodies, including the Commodity Futures Trading Commission (CFTC). In response, the exchange has taken drastic measures, including announcing a one-third reduction in its workforce this week. Notably, high-ranking officials like CEO Brian Shroder, the head of legal, and the chief risk officer are among those departing.
The SEC’s examination of the exchange occurs during a pivotal moment for the cryptocurrency industry. As this situation unfolds, the crucial question revolves around whether Binance.US can meet the SEC’s compliance expectations, particularly in areas such as asset custody and securities laws. While Binance.US maintains that the SEC’s actions are exaggerated, the regulatory watchdog remains unconvinced. As both parties stand their ground, the outcome remains uncertain, casting a shadow over the exchange’s operations in the United States.
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