Binance Is Supposedly Separate From Crypto Custodian Ceffu. The SEC Has Questions

As regulators prepare to square off with one of the world’s biggest crypto exchanges in court, Ceffu has denied any ties to Binance or U.S. operations. The reality is murkier.

AccessTimeIconSep 18, 2023 at 5:47 p.m. UTC
Updated Sep 19, 2023 at 3:01 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

This afternoon in a Washington, D.C., courtroom, lawyers will argue over a seemingly straightforward question: Is Binance.US a client of crypto custody provider Ceffu or not?

Regulators are concerned over the apparent use of Ceffu by the U.S. arm of the world’s largest crypto exchange, because they’re wary of giving a foreign entity control over American customers’ assets.

In June, the Securities and Exchange Commission (SEC) sued Binance.US, the exchange’s international arm Binance Holdings and Binance founder Changpeng “CZ” Zhao for allegedly operating an unlicensed securities exchange. The agency is now seeking to ensure American users’ assets won’t be squirreled overseas before judicial proceedings conclude.

As the case progresses, the parties are making claims that are difficult to reconcile.

‘Not a Binance entity’

Ceffu was launched in December 2021, originally as Binance Custody. It rebranded in February 2023, with a new name inspired by Binance’s Secure Asset Fund for Users, which was in turn a play on the crypto term SAFU, or “safe,” and with a logo now distinct from, if vaguely reminiscent of, Binance’s.

Ceffu was previously called Binance Custody (Ceffu website)
Ceffu was previously called Binance Custody (Ceffu website)

At the time, the company’s users were assured that this evolving identity wouldn’t affect products or user experience – but now it’s at the center of legal proceedings, and the custody unit is apparently going one step further, claiming there’s no relation to Binance.

In documents filed in August and unsealed in September, the SEC expressed concern that Binance.US’ use of Ceffu could breach a previous legal deal intended to ensure only local U.S. staff have access to funds. That agreement prohibits Binance.US from using any other entity affiliated with Binance or Zhao for custody, though it can use third-party U.S.-based providers.

In a Sept. 12 legal filing, Binance.US said the SEC’s concerns are “much ado about nothing,” as the wallet provider doesn’t get control over customer money. Rather than distancing itself from the custodian, it said that Ceffu is merely the market name of wallet custody software that Binance Holdings developed and subsequently licensed to the U.S. arm.

Those claims appear to have been undermined by Ceffu itself, which in a Friday post said it excluded the U.S. from its operations, and that it “strongly reject[s]” the SEC’s claim that it provided third-party “wallet custody software and support services” to Binance.US.

Binance.US did not immediately respond to a request for comment on that apparent contradiction.

A spokesperson for Ceffu went further, telling CoinDesk that it is “factually incorrect” that Ceffu was provided by or offered by Binance or Binance Holdings, as it’s a “fully independent third-party technology service provider.”

“Ceffu is not a Binance entity,” said the spokesperson, who refused to identify themselves. “Prior to rebranding in February 2023, our entity was always run independently from Binance activities, and thus fully separate from Binance.”

Blurred lines

But delving deeper into legal documents suggests a different story. According to its own terms and conditions, Ceffu is known as Bifinity UAB. Bifinity’s registration in Lithuania – allowing it to provide crypto exchange and wallet services – is still listed on Binance’s website among the various regulatory recognitions Binance holds.

Ceffu's registration in Lithuania, made via Bifinity, from the Binance website
Ceffu's registration in Lithuania, made via Bifinity, from the Binance website

A November 2022 SEC filing describes Zhao, chief executive officer of the Binance group, as Bifinity’s sole shareholder, and says that two of Bifinity’s three board members also worked for Binance. A June affidavit filed by the SEC says the company is still ultimately owned by Zhao.

It’s just possible that Ceffu – after its February rebrand – also made a clean break from the Binance mothership, and that Binance.US has indeed had no dealings with that newly independent company or its products. A spokesperson for Ceffu would not discuss its current ownership or management.

But if Ceffu has significantly changed governance over recent months, that’s left no trace on the public record. The SEC, and indeed Ceffu's institutional users, could be forgiven for feeling confused about the company's exact status.

Edited by Marc Hochstein, Nick Baker, Nikhilesh De and Sandali Handagama.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Jack Schickler

Jack Schickler was a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.