The Securities and Exchange Commission (SEC) has brought forth new allegations against Binance CEO Changpeng Zhao, also known as CZ, and the company’s financial manager, Guangying Chen. The SEC claims that they channeled billions of dollars from customers through a holding company, sparking fresh concerns about Binance’s business practices.
According to the SEC’s court filing, CZ and Chen funneled customer funds through an intermediate holding firm called Key Vision Development Limited. These funds were then transferred to organizations under Zhao’s control.
To support these allegations, the SEC has presented testimonial evidence from Sachin Verma, an accountant employed by the regulatory body. The SEC intends to use this evidence in its pursuit of a court-issued temporary restraining order to freeze Binance.US assets.
Based on Verma’s examination of bank statements related to Binance and Zhao’s corporate network, the SEC alleges that $12 billion was directed to Zhao, while $162 million went to a Singapore-based company controlled by Chen. The majority of these funds are currently held in offshore accounts.
Despite Binance’s public denial of mingling company funds with customer deposits, the SEC’s investigation, which dates back to 2020, suggests otherwise. The SEC accuses Binance of holding assets belonging to its US affiliate until December 2022.
The court hearing to address the restraining order is scheduled for June 13, where further developments will unfold.