The Securities and Exchange Commission (SEC) has filed a new court document alleging that Binance CEO Changpeng ‘CZ’ Zhao and Guangying ‘Helina’ Chen received billions of dollars of customer funds through their holding company. According to the SEC, these funds were transferred to firms controlled by Zhao through an intermediary holding company called Key Vision Development Limited. The allegations are supported by testimony from Sachin Verma, an accountant employed by the SEC, who will present the evidence as part of the regulator’s request for a temporary restraining order to freeze assets on Binance.US.
In the court filing, the SEC states, “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.”
According to Verma’s forensic analysis of bank statements from Binance and Zhao’s affiliated companies, the SEC alleges that $12 billion was sent to Zhao and $162 million was sent to a company in Singapore controlled by Guangying Chen. The documents reveal that Chen and Zhao controlled several companies that did not have an obvious connection to Binance. The SEC further claims that the majority of the funds sent to Zhao and Chen are now held in offshore accounts.
Chen serves as Binance’s back office and financial manager. A recent report suggested that she controlled accounts belonging to Binance.US, contradicting the unit’s supposed independence. Binance, on the other hand, has publicly denied commingling customer deposits with company funds and has stated that Merit Peak functions as a platform for CZ to trade his “self-made wealth.”