Changpeng Zhao (CZ), the CEO of Binance, has refuted claims that he received a $250 million loan from BAM Management, the holding company of Binance.US, clarifying that it was the other way around. CZ took to Twitter to state that he “loaned $250 million to BAM a while back, not the other way around,” adding that he has yet to reclaim the loaned amount.
This dispute stemmed from a report by Decrypt, a crypto media outlet, which initially stated that court documents related to a lawsuit revealed that BAM Management US Holdings issued a $250 million convertible note to CZ in December. The article was later updated to correct this information, stating that CZ was the one who extended the loan to BAM.
While acknowledging the inaccuracies in Decrypt’s report, CZ did not specify the other details that he believed were incorrect.
SEC’s Legal Battle with Binance
This clarification from CZ comes amid an ongoing legal battle between Binance and the U.S. Securities and Exchange Commission (SEC). In June, the SEC filed a lawsuit against Binance and its CEO, alleging multiple violations of federal securities laws, including operating an unregistered exchange and offering unregistered securities, such as BNB token and BUSD stablecoin, to the public.
Binance.US, the U.S. arm of Binance, has vehemently denied the SEC’s allegations in non-motion documents, asserting that there is no evidence of commingled funds, control by CZ, or diversion of customer assets.
Throughout this legal ordeal, the SEC has struggled to obtain information from Binance, leading to motions requesting greater access to Binance executives for depositions and more detailed information.
Regulatory Pressure Impacts Binance’s Trading Volume
Aside from the legal battle in the U.S., Binance has faced significant regulatory scrutiny globally, resulting in a sharp decline in its Bitcoin trading volume. The platform’s 7-day average spot trading volume for Bitcoin dropped by 57% since the start of September. Market share also shrunk by 25% between February and June.
Regulatory pressures have extended to France, where authorities investigated allegations of illegal digital-asset services and money laundering. In Nigeria, Binance was ordered to cease operations by the country’s Securities and Exchange Commission (SEC). The exchange has also faced regulatory challenges in several European countries, including Belgium and Austria, as it prepares to comply with the EU’s forthcoming Markets in Crypto Assets (MiCA) regulations
