U.S. SEC Accuses Binance.US Of Suspicious $250 Million Fund Flows In Ongoing Legal Battle

In a recent development in the ongoing legal battle between Binance.US and the U.S. Securities and Exchange Commission (SEC), court documents reveal that the SEC has raised concerns over suspicious fund flows involving Binance, as reported by Decrypt.

According to the court documents made public, the SEC pointed out that on June 6, Binance CEO Changpeng Zhao withdrew $250 million from Binance.US Subsidiary BAM Management and subsequently transferred it to BAM Trading, the entity behind Binance.US. Additionally, the transaction included a $183 million loan from BUSD issuer Paxos Trust Company to BAM Trading.

However, Binance.USs legal team responded by stating that BAM Management US Holdings had issued a $250 million convertible note to Zhao in December. Zhao used BUSD to purchase the note, with $183 million sent to Paxos Trust Company to convert BUSD into USD, which was then transferred to BAM Trading in January 2023.

The SEC had previously accused Binance.US of non-cooperation with the investigation and raised questions about its use of custody services provided by Ceffu, allegedly violating previous agreements designed to prevent asset flow overseas.

Binance.US responded by asserting that concerns regarding Ceffu were baseless, and the SECs request for more documents was seen as an attempt at evidence phishing. They clarified that creating a wallet through Ceffu did not grant the international arm of the company custody or access to customer funds.

This latest revelation comes after a court decision on September 18 to unseal previously sealed documents related to the Binance lawsuit. As the legal battle continues, both parties remain entrenched in their positions, leaving the outcome uncertain.