CZ Denies Binance.US Used Ceffu or Binance Custody in Apparent Contradiction

Binance.US previously told a DC court it used custody software offered by Binance’s international arm that was later rebranded Ceffu.

AccessTimeIconSep 19, 2023 at 2:25 p.m. UTC
Updated Sep 19, 2023 at 3:14 p.m. UTC
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Crypto tycoon Changpeng “CZ” Zhao has denied that his exchange Binance’s U.S. arm used a custody software provided by its international counterpart, in an apparent contradiction with previous statements by Binance.US in legal filings.

Binance Custody, a wallet service later rebranded Ceffu, is at the center of a probe by the Securities and Exchange Commission (SEC), which is seeking assurances that the U.S. exchange’s assets won’t be transferred overseas.

“For the record, Binance.US does not use, and have NEVER used Ceffu or Binance Custody,” CZ, who is Binance's founder and chief executive officer, said in a Tuesday post on social network X, previously Twitter, the day after the SEC and Binance.US squared off in a Washington, DC court on the issue.

That stands in stark contrast to previous statements made by lawyers for the U.S. exchange – identified as BAM in court filings –which said that Binance.US had used custody software provided by international arm Binance Holdings Ltd (BHL), a program that was later marketed as Ceffu.

BAM “relies on wallet custody software developed by BHL to maintain the digital asset wallets that hold much of its customers’ assets,” said a Sept. 12 court filing by Binance.US, which is seeking to shake off SEC charges it operated an unregistered crypto exchange, adding that when the company later “learned that BHL was planning to market the software commercially under the name ‘Ceffu,’ it adopted the name as a shorthand reference to the software, including in correspondence with the SEC."

"While BAM referred to the BHL software as 'Ceffu,' it never suggested that it licensed software from any entity other than BHL," the filing by Binance.US added. "BAM has been clear that it relies on wallet custody software licensed from BHL in all its correspondence with the SEC and submissions to this Court."

In a further court filing the SEC says is Binance.US' Digital Asset and Custody Operations Policy, the U.S. firm states that it licensed custody software and support services from Ceffu, which the document says was previously BHL, again appearing to contradict CZ's tweet.

A Binance.US custody policy filed by the SEC appears to contradict CZ's claim
A Binance.US custody policy filed by the SEC appears to contradict CZ's claim

Ceffu – rebranded from Binance Custody in February – last week denied that it had provided services to Binance.US, or that it operated in the country at all, but its relationship to Binance remains a gray area.

An Aug. 3 screengrab of the Ceffu website, detected and published by the SEC, suggests Ireland-based Binance Institutional Holdings Limited controls the custodian's trademarks and data and describes a Singaporean entity named Binance Institutional SG Pte as one of its operating arms. References to Binance appear to have been removed in an Aug. 8 website update.

Binance.US and CZ have not responded to requests for further clarity.

UPDATE (Sept. 19, 15:04 UTC): adds reference to Binance.US custody policy

Edited by Sandali Handagama.


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Jack Schickler

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

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