In a recent tweet, David Schwartz, the Chief Technology Officer of Ripple, responded to a critic who claimed that Changpeng Zhao (CZ), the CEO of Binance, lied about the custody service used by Binance’s sister arm, Binance.US. This controversy arises amidst a report that the U.S. Securities and Exchange Commission (SEC) sought court approval to inspect Binance.US over concerns regarding its custody practices.
SEC Seeks Approval to Inspect Binance.US
According to the report, the SEC believes that Binance.US used Ceffu, a rebranded custody service provider of its parent firm, Binance, to hold customers’ funds. The SEC wants to investigate whether Binance.US violated the agreement with U.S. regulators by moving users’ funds out of the United States. Such actions could be considered a breach of trust and potentially lead to regulatory consequences.
Denial from Binance CEO
In response to these allegations, CZ denied that Binance.US used Ceffu or any Binance custody service. In a tweet, he emphatically stated, “You can’t just make this stuff up.” CZ’s assertion comes as a strong denial of any wrongdoing on the part of Binance.US and attempts to dispel the claims made by the SEC and the critic.
Ripple CTO Points Out Flaws in Critic’s Claim
A well-known critic of centralized crypto platforms, Bitfinexed, countered CZ’s claim that he was lying to the public by sharing a document that supposedly exposed CZ as a liar. In response, David Schwartz highlighted the weaknesses in Bitfinexed’s claim. He pointed out that CZ was clarifying that Binance.US never used custody services from the parent firm, while Bitfinexed’s document merely detailed Ceffu’s product offering. Schwartz questioned whether the two pieces of evidence were discussing the same topic, suggesting that Bitfinexed’s argument may be flawed.
This exchange between the Ripple CTO and the critic raises questions about the validity of the claims against CZ and Binance.US. It highlights the importance of examining all available evidence and considering the context before forming judgments.
Court Denies SEC’s Inspection Request
Notably, the U.S. court denied the SEC’s attempt to inspect Binance.US’ software and tech infrastructure. This development suggests that the court does not deem the SEC’s concerns regarding Binance.US’ custody practices to be sufficient grounds for a thorough inspection. However, it is essential to note that this court decision does not invalidate the claims made by the SEC or the critic.
In conclusion, the controversy surrounding Binance.US and its alleged use of Ceffu as a custody service has caused significant tension between the company, the SEC, and critics. The Ripple CTO, David Schwartz, has entered the discussion by challenging a critic’s claim against Binance’s CEO, Changpeng Zhao. The court’s denial of the SEC’s inspection request adds another layer of complexity to the situation. Ultimately, it is crucial for all parties involved to present clear evidence and engage in open dialogue to reach a fair resolution. Trust and transparency are essential in the cryptocurrency industry, and instances like these test the integrity of the participants.