CZ post on X about Ceffu and Binance.US contradicts SEC claims, adds to confusion

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After a judge declined to give the United States Securities and Exchange Commission (SEC) unfettered access to Binance.US software at a hearing on Sept. 18, Binance CEO Changpeng Zhao (CZ) took to X (formerly Twitter) to make a statement about one point of contention with the SEC.

“For the record. Binance US does not use, and have NEVER used Ceffu or Binance Custody. You can’t just make this stuff up.” CZ said in a Sept. 19 post. CZ’s statements did not make the record any clearer.

For the record. Binance US does not use, and have NEVER used Ceffu or Binance Custody.

You can’t just make this stuff up. ‍♂️ https://t.co/JIkIVTf8tc

— CZ Binance (@cz_binance) September 19, 2023

The role Ceffu played in the Binance.US ecosystem has been a concern for the SEC because Binance.US has agreed to the SEC’s June 17 consent order, which stated:

“For the avoidance of doubt, U.S.-based personnel for BAM Trading and BAM Management will have complete control over Customer Fiat Assets and Customer Crypto Assets.”

BAM is the Binance.US holding company. Bloomberg reported in May, citing a 2022 corporate filing, that the company that runs Ceffu was owned by CZ, who is not U.S.-based.

Ceffu posted a statement on its website on Sept. 15 disputing an SEC claim in a Sept. 14 court filing that linked it to Binance.US. Ceffu stated that it provides services “in select jurisdictions, excluding the United States, among others.”

However, a Binance.US document titled “Binance.US Digital Asset & Custody Operations Policy” that was marked “Confidential” and submitted to the court on Sept. 15, in a section titled “Systems. Overview,” it stated:

“We license wallet custody software and support services from Ceffu (previously Binance Holdings Limited). […] The Ceffu solution makes up a majority of our wallet technology.”

Binance launched Binance Custody in 2021. Ceffu was later rebranded from Binance Custody. In March, a Binance spokesperson told Cointelegraph that Ceffu was its “independent institutional custody partner.”

So @cz_binance trying to claim Binance US never used “Ceffu” because at the time the agreement was signed, Ceffu was called “BHL Wallet Solution” & the entity was Binance Holdings Limited, which later became Ceffu.

But he also forgets, his own lawyers also admitted the new… pic.twitter.com/373LEiNuaD

— Adam Cochran (adamscochran.eth) (@adamscochran) September 19, 2023

In its Sept. 18 court filing, the SEC referred to Ceffu as a “mysterious Binance-related entity” and pointed out that Binance.US has been inconsistent in its descriptions of its relationship with Ceffu in its dealings with the agency. “It is more than likely that BAM still doesn’t understand what Ceffu is,” the SEC stated.

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