Binance has been on the receiving end of the US Securities and Exchange Commission (SEC) litigation efforts against crypto institutions since June of this year. The regulating body filed thirteen different charges against the world’s biggest crypto exchange for allegations including wash trading and commingling customer funds.
The SEC asked the US District Court for permission to investigate Binance’s financial records, alleging that the company and its subsidiaries shifted customer funds offshore. The commission contends that Binance has been uncooperative in sharing sufficient documentation related to financial activities in its US and offshore subsidiaries.
US District Judge Zia Faruqui denied the SEC’s request while ordering Binance to provide additional documentation. Furthermore, the court told Binance US that it’s not convinced it has total autonomy over its assets and funds owned by US customers.
Binance founder Changpeng Zhao has now responded to further allegations regarding a $250M loan on his personal X account.
On September 19th, Decrypt reported that court documents from the ongoing lawsuit between Binance and the SEC revealed BAM Management US Holdings issued a $250 million convertible note to Zhao in December.
In response, the founder, CZ, tweeted to refute the accuracy of the report, saying “They got the direction wrong. I loaned $250 million to BAM a while back, not the other way around. And have not taken it back.”
After more than three months of legal wrangling, CZ is now seeking a full dismissal of the lawsuit against his company. In a 60-page filing, Binance and CZ argue that the SEC overstepped its bounds by suing the exchange over allegations including wash trading, evasion of US regulators, and mixing customer funds.
Binance’s legal team contends that the SEC attempted to impose penalties on the company without establishing a clear regulatory framework for the cryptocurrency sector.
In another 56-page document, Binance.US also attempts to have all charges against it dropped.
Both the mother company and its US subsidiaries have sustained serious damage to their SEC troubles, including halting USD transactions and the departure of key figures in their respective managements.
Binance representatives did not immediately respond to a request for comment.