SEC vs Binance.us : SEC Accused the Exchange of Not Having 1:1 of Customer Funds, Relies on Main Binance, Association with the Custody Platform Ceffu and Undisclosed Important Documents

In a recent filing, the SEC accused Binance.us of not maintaining customer funds with a 1:1 ratio at certain times and that it relies on the main Binance for its functioning and also moves funds between both companies. And they have requested that the court approve an inspection of Binance.US because the firm had failed to produce documents asked by the regulator in ongoing legal proceedings.

The SEC also alleged that Binance.us was an unlicensed securities exchange and that there's an urgent need for inspection. They also believe that the custody platform Ceffu (formerly Binance Custody) may also be serving Binance.US and therefore being used to shift U.S. customer funds out of the country.

Also, Binance failed to convince the court that customer assets were untouched and were in their control all the time, and they kept changing their statement. And Binance.us was also accused of hiding key documents and fighting to avoid handing over certain documents, which might shed light on its shady business. One more point: the SEC wants to take control of the customer funds from Binance.us for the time being.

Source: https://www.courtlistener.com/docket/67474542/securities-and-exchange-commission-v-binance-holdings-limited/#entry-113