SEC Report Exposes Binance CEO’s $12 Billion Money Trail to Personally Controlled Firms

The SEC (Securities and Exchange Commission) said Zhao’s Merit Peak company received money from customers. Key Vision Development Limited sent the money through this company.

SEC Alleges Binance Executives Received Billions from Customer Funds

The Securities and Exchange Commission (SEC) alleges Binance CEO Changpeng ‘CZ’ Zhao and Guangying ‘Helina’ Chen received billions of dollars from customer funds. As a regulator, the SEC enforces securities laws in the country.

Zhao and Chen’s holding company got the money so that they may have benefited personally. In any case, these are allegations that haven’t been proven.

The involvement of the SEC indicates they’re investigating the matter and potentially suing Binance. Accusations like this can hurt a company’s reputation and relationship with customers and regulators.

According to the SEC, the money was sent to Zhao’s companies through Key Vision Development Limited. In other words, Zhao influenced those companies and got the money through them.

Sachin Verma, an SEC accountant, testified to support the SEC’s allegations. SEC will use this testimony to get a court order freezing Binance.US’s assets temporarily. 

Verma’s testimony provided evidence that Binance.US had violated securities regulations which would make it necessary for the SEC to take action to protect investors. Folding assets is necessary to prevent Binance.US from potentially using the assets to continue the violations.

“The SEC has been unable to determine why a Zhao-controlled entity that was purportedly trading on the Binance.US Platform using Zhao’s personal funds would have acted as a ‘pass through’ account for billions of dollars of Binance Platforms customers’ funds,” the court filing reads.

SEC Allegations: Billions Sent to Zhao and Chen in Binance Case

Verma analyzed bank statements from Binance and Zhao’s affiliated companies and found $12 billion had been sent to Zhao and $162 million to a company controlled by Guangying Chen. As a result of Verma’s forensic investigation, the SEC makes these accusations.

SEC accountant Sachin Verma analyzed bank statements from Binance and various companies associated with Zhao to support the SEC’s allegations. According to Verma’s analysis, around $12 billion went to Zhao, while $162 million went to a company controlled by Guangying Chen.

As a result of these findings, the SEC has a strong case against Binance and its executives. It may help the SEC build a stronger case and take appropriate legal action. 

According to the documents, several companies Chen and Zhao controlled weren’t directly affiliated with Binance. Binance isn’t mentioned in the names of these companies.

The SEC says most of the money sent to Zhao and Chen is in “offshore” accounts. Most of the money is in accounts outside of the SEC’s jurisdiction, which could make it harder to access or regulate.

Currently, Chen is Binance’s back office and finance manager. According to a report, she controls Binance.US accounts, which contradicts the idea that the unit is independent. The conflict of interest or lack of independence of Binance.US might be a problem. 

Binance denies mixing customer deposits with company funds. Merit Peak is a platform for CZ to trade his personal wealth, which he has accumulated independently. Customer funds are clearly separated from CZ’s personal trading endeavors through Merit Peak, Binance says.

In 2020, the SEC started investigating Binance. The US. Despite telling regulators and the public they were separate entities, Binance kept custody of its U.S. affiliate’s assets until December 2022. The SEC and Binance have a June 13 court date for the restraining order.