SEC on Monday sued Binance’s U.S. and global entities, alongside its CEO Changpeng “CZ” Zhao, alleging that they had run an unregistered securities exchange by authorizing people to trade crypto. The regulator has since aimed to freeze Binance.US assets.
However, the U.S. Securities and Exchange Commission (SEC) has been probing Binance.US since at least 2020, Tuesday’s court filing revealed.
In the filings, the regulator revealed proof of hundreds of millions of dollars in profiteering by the crypto exchange.
Billions of Funds Rerouted to Personal Firm Accounts
Binance CEO Changpeng Zhao (CZ) obtained billions of dollars of client funds through their holding corporation, the Securities and Exchange Commission (SEC) alleged in a new court document.
SEC asserted that CZ rerouted the funds to a corporation he oversees via an intermediate holding firm known as Key Vision Development Limited.
Shortly after, evidence for these allegations came via testimony produced by Sachin Verma, an accountant employed by the SEC. to appeal a temporary restraining order to freeze assets on Binance.US
The SEC has been incapable of pinpointing why a Zhao-controlled entity that was trading on the Binance.US Platform using Zhao’s funds would have operated as a pass account for billions of dollars of Binance Platforms customers’ funds.
Binance Asserted Denial of Accusation
The SEC alleges, via Verma’s forensic analysis of the bank declarations of Binance and Zhao’s web of corporations, that $12 billion was forwarded to Zhao and $162 million to a Guangying Chen-controlled corporation in Singapore.
Furthermore, Chen and Zhao operate several firms with no apparent connection to Binance in their name, The SEC says that the majority of the funds sent to Zhao and Chen are currently in offshore accounts.
Binance has publicly rebutted the claims of customer deposits rerouted and company funds and has claimed that Merit Peak is a vehicle for CZ to trade his self-made wealth accumulation.