The U.S. Securities and Exchange Commission (SEC) is doubling down on its scrutiny of Binance.US, urging a D.C. court to greenlight an inspection. This move amplifies the regulator's ongoing concerns over the crypto exchange's asset custody practices.

Legal Battle Intensifies

Earlier in the year, the SEC filed a lawsuit against Binance.US, its parent company Binance Holdings, and founder Changpeng “CZ” Zhao, accusing them of running an unlicensed securities exchange. In a recent court filing, the SEC emphasized the "urgent need" for an inspection, particularly focusing on Binance's partnership with custody platform Ceffu.

The SEC's Unanswered Questions

The SEC suspects that Ceffu—formerly known as Binance Custody—is being used to illicitly transfer U.S. customer funds overseas, which would breach previous agreements. The filing highlights that Binance.US' holding company, BAM Trading Services, has been vague and inconsistent in establishing control over customer assets, thus justifying the need for the inspection.

A Hearing Awaits

While Ceffu claims to be a "fully independent third-party technology service provider," its exact relationship with Binance remains hazy. A court hearing scheduled for later today might bring clarity to the SEC's allegations and Binance's contentious asset management practices.