The United States Securities and Exchange Commission (SEC) has requested “alternative notice” from the District Court of Washington, DC, to serve a subpoena on Changpeng Zhao, the CEO of cryptocurrency exchange Binance.
Zhao and Binance were recently sued by the SEC for allegedly unregistered securities trading.
In a document on the case presented before the District Court on June 7, the SEC requested an alternative notice. He explains his self-evident position that typical service (requiring the presence and signature of the person served) might be difficult in this case:
“Binance and Zhao are not your typical foreign entity and individual, as they are widely known to disagree with the premise of a headquarters or domicile, let alone identify one, and Zhao is famously protective of disclosing his whereabouts”.
Despite the alleged difficulty in serving Zhao, it is likely that the CEO is not legally required to appear in court simply to respond to the subpoena; however, courts generally require some type of notice to be given even if the defendant is not required to appear.
I was told this is just part of the SEC compliant process. Nothing new.
Also told I won’t have to appear in person. No need to FUD. pic.twitter.com/NYUlBCIirG
— CZ Binance (@cz_binance) June 7, 2023
I was told this is just part of the SEC compliance process. Nothing new.
They also told me that I will not have to appear in person. There is no need for FUD.
The SEC also asks the court to order Zhao and Binance to promptly provide a “sworn accounting” – essentially a legal disclosure of financial information.
According to the complaint, The SEC has not been able to discern the full extent of the defendants’ assets, the exact whereabouts of investor money, or the condition or location of other assets that may be used to satisfy a money judgment against the defendants.
Once again, the SEC cites logistical issues as mitigating factors. The statement claims that the request for a sworn accounting stems from “BAM Trading’s inability to provide accurate information” about Zhao’s whereabouts or the “overseas location” of the company.
BAM Trading is the organization that oversees Binance.US in partnership with Binance, a setup intended to allow the company to keep its US operations and other operations separate from each other.
Zhao’s location remains unknown at the time of publication. You are a Chinese-born Canadian citizen who, apparentlybought a house in Dubai in 2021. However, in accordance with Binance spokesperson Dewy Mustajab, As of March 28, 2023, the CEO splits his time between Dubai and France.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.