Sachin Verma, an assistant chief accountant employed by the US Securities and Exchange Commission’s Division of Enforcement, supports the SEC’s decision to freeze the US assets of Binance.
According to Verma’s findings, Binance CEO Changpeng Zhao (CZ) and Guangying Chen, Binance’s listed representative in China, transferred nearly $12.2 billion of customer funds to Key Vision Development Limited, a holding company. The funds were then moved to Zhao and Chen's offshore accounts. Chen’s Singapore company received $162 million of that money.
On Tuesday, SEC filed a motion for a temporary restraining order and preliminary injunction primarily targeting the assets of Binance.US, which serves as the US subsidiary of Binance based on the Cayman Islands.
The June 6 press release states that SEC "is seeking emergency relief against Binance Holdings Limited, BAM Trading Services Inc., BAM Management US Holdings, Inc., and their founder, Changpeng Zhao, to ensure that Binance.US customers’ assets are protected and remain in the United States through the resolution of the SEC’s pending litigation of this matter."
Verma's report included in the official declaration was first released on June 5 and amended yesterday.
"The information set forth herein is based upon my personal review of financial records such as bank statements, deposits, canceled checks, wire transfers, signature cards, and other account documents produced to the SEC by the defendants, Silvergate Bank, Case 1:23-cv-01599-ABJ Document 21 Filed 06/07/23 Page 1 of 27 2 Signature Bank, FedWire and other parties pursuant to subpoenas and document requests (“financial records”) as of this date," Verma’s declaration says, emphasizing the possibility of modifications in the classification and summarization of financial records "based on additional information that may be produced at a later date."
The court filing reads that "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."
Although there are significant legal issues, Binance asserts that there won't be any issues with conducting deposits and withdrawals and that user assets will remain secure.
In the midst of the legal battle, Zhao tweeted about the growing FUD regarding his persona and activities.
"Multiple FUDs are going on. This one widely circulated in Asia, saying 'there was an argument I had with an American inspection agency, and I took out an AK47. The police then opened fire first, and I got wasted...' This is the second time I got wasted imaginarily in Asia news. Last one involved a basement full of BNB," Binance’s CEO shared with his Twitter followers today. According to CZ, whoever wrote these things about him, also added, that Zhao had been shot twenty-seven times.