In a recent court document, the Securities and Exchange Commission (SEC) has alleged that Binance CEO Changpeng Zhao (CZ) and Guangying Chen, through their holding company, received billions of dollars of customer funds.
The SEC claims that these funds were funneled to Zhao-controlled firms via an intermediary holding company called Key Vision Development Limited.
The evidence supporting these allegations stems from testimony provided by Sachin Verma, an accountant employed by the SEC. As a result, the SEC seeks a temporary restraining order to freeze assets on Binance.US.
Binance has previously denied any commingling of customer deposits and company funds, stating that Merit Peak serves as a platform for CZ’s personal trading activities.
The SEC alleges that billions of dollars in customer funds were transferred to firms controlled by Binance CEO Changpeng Zhao and Guangying Chen.
According to court documents, these funds were routed through an intermediary holding company called Key Vision Development Limited. Sachin Verma, an accountant employed by the SEC, provided testimony and conducted a forensic analysis of bank statements associated with Binance and Zhao’s network of companies.
The court filing suggests that an entity controlled by Zhao, which was purportedly using his personal funds for trading on the Binance.US platform, acted as a “pass-through” account for billions of dollars of customer funds. The SEC raises concerns about the lack of clarity regarding the reasons behind such a setup.
Verma’s analysis of bank statements indicates that approximately $12 billion was sent to Zhao-controlled entities, while $162 million was transferred to a company controlled by Guangying Chen in Singapore.
Notably, many of the companies associated with Zhao and Chen had no apparent connection to Binance, as revealed by the documents.
Offshore Accounts and Chen’s Role: The SEC claims that a significant portion of the funds sent to Zhao and Chen are now held in offshore accounts.
Additionally, Guangying Chen, described as Binance’s back office and financial manager, has reportedly controlled accounts belonging to Binance.US, contradicting the unit’s supposed independence.
Binance has publicly denied any commingling of customer deposits and company funds.
The exchange has emphasized that Merit Peak, the holding company in question, serves as a vehicle for CZ to trade his personal wealth, distancing it from customer funds.