SEC claims Binance illegally moved $12 billion to companies controlled by CEO Changpeng Zhao

By: Mark Jessy

June 8, 2023 9:45 AM

According to the SEC, billions of dollars in customer payments were routed to Zhao's firm Merit Peak through a holding company called Key Vision Development Limited.

The US Securities and Exchange Commission (SEC) alleges→ in a new court document that Binance CEO Changpeng 'CZ' Zhao and Guangying 'Helina' Chen received billions of dollars in consumer cash through their holding firm.

According to the SEC, the monies were transferred to entities controlled by Zhao through an intermediate holding company known as Key Vision Development Limited.

The proof for these claims comes from testimony given by Sachin Verma, an SEC accountant, which will be used as part of the regulator's arguments in requesting that the court approve a temporary restraining order freezing assets on Binance.US.

"The SEC has not been able to ascertain why a Zhao-controlled firm was pretending to trade on the Binance.US" Using Zhao's personal funds, the US Platform might have served as a 'pass through' account for billions of dollars of Binance Platforms clients' funds," according to the court filing.

According to Verma's forensic investigation of Binance and Zhao's bank statements, $12 billion was paid to Zhao and $162 million to a Guangying Chen-controlled business in Singapore.

According to the documents, Chen and Zhao held a variety of firms with no evident relation to Binance in their names. According to the SEC, the vast majority of the cash paid to Zhao and Chen are currently in accounts "offshore."

Chen oversees Binance's back office and finances. According to a recent revelation, she was in charge of Binance.US accounts, which contradicted the unit's claimed independence.

Binance has officially disputed that client deposits and corporate funds were mixed, and has stated that Merit Peak is a vehicle for CZ to trade his "self-made wealth."

The SEC has been looking into Binance.US since at least 2020 and claims that, despite promising regulators and the public that they were different businesses, Binance kept custody of its U.S. affiliate's assets until December 2022.

The SEC and Binance will be appearing in court on June 13 to discuss the temporary restraining order.