The CEO of Binance, Changpeng Zhao, also known as CZ, has been kept busy dispelling serious allegations since the SEC lawsuit, but new allegations are coming every day. A $250 million loan and Binance US’s relationship with its wallet custody solution Ceffu are the latest issues that have circled the world’s largest crypto exchange company’s chief.
Changpeng Zhao Corrects the $250 Million Loan Direction
On Wednesday, September 20, a mainstream crypto media platform reported that Changpeng Zhao took a $250 million loan from BAM Management US Holdings, the firm that acts as Binance US’ holding company. Citing court documents unsealed in the court this week, the report claimed that the exchange’s CEO took a loan from BAM Management and then transferred it to BAM Trading.
CZ was quick to refute the claims by saying that it was actually he who made the loan to BAM Management. In an X post, he said that the reporting media platform had gotten the directing wrong as he loaned $250 million to BAM, which is yet to be recovered.
The amount of wrong information is just…
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. 🤷♂️ pic.twitter.com/encGx1u557
— CZ 🔶 Binance (@cz_binance) September 20, 2023
Changpeng Zhao said:
“The amount of wrong information is just… 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.”
In the document unsealed on June 6, the day after the SEC sued Binance, the regulator asked the exchange about a $183 million transfer from Paxos Trust Company to BAM Trading in January 2023.
According to the documents unsealed this week, BAM Management US issued a $250 million convertible note to Changpeng Zhao in December 2022. The CEO “funded the purchase of this note with BUSD, $183 million of which was sent to Paxos Trust Company, as an issuer of BUSD, to convert the BUSD into USD.” After CZ’s response, the report was edited to correct the loan direction.
The Ceffu Problem is Still There
As reported, the court recently denied the SEC’s request to inspect the Binance US software after the regulator complained about Binance being noncooperative in investigations. The main concern for the SEC is the custody of Binance US customers.
The SEC claims that Binance US is using wallet custody solution Ceffu, a rebranded name from Binance Custody, which violates a prior agreement meant to prevent funds from being diverted abroad. Therefore, the securities regulator demanded the inspection of Binance US software to investigate.
Changpeng Zhao, in an X post, claimed that “Binance US does not use, and have NEVER used Ceffu or Binance Custody.”
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
However, an X account, WhaleWire, claims that the Binance CEO is lying, as according to the documents submitted by his own lawyers, they did use Ceffu. According to documents WhaleWire shared, the Ceffu solution makes up a majority of Binance wallet technology.
CZ Binance caught lying once again.
This time, he denies that Binance US was using (Ceffu) Binance Holdings Limited to custody their funds. However, according to the court documents his own lawyer submitted, they did.
Binance also quietly rebranded to Ceffu to avoid too much… pic.twitter.com/HoYTfso3ex
— WhaleWire (@WhaleWire) September 20, 2023
