SEC seeks new ways to serve legal papers to Binance CEO.

The U.S. Securities and Exchange Commission (SEC) is searching for alternative ways to deliver legal papers to Binance and its CEO, Changpeng Zhao (CZ), who are difficult to locate. In a court filing with the District Court in the District of Columbia on Thursday, the SEC noted that the headquarters or domicile of Binance and its executive are not known and labeled them as “not the typical foreign entity and individual”. The SEC is therefore seeking alternative methods of delivering legal papers to the parties involved, primarily by sending copies of the documents to their attorneys. The filing also mentioned that CZ is known for his reluctance to reveal his whereabouts.

CZ has often boasted that Binance’s refusal to settle headquarters in any particular jurisdiction is what makes it resilient. In a blog post last year, the CEO explained how Binance chose to adopt a remote working model open to global workers after all exchanges were ordered to cease operations in China in September 2017, shortly after the exchange was launched. CZ, who was born in China but is a Canadian citizen, asserts that Binance is not a Chinese company, nor does it own any legal entities in the country.

CZ was issued a summons by the U.S. District Court on Wednesday, which requires him to respond within 21 days of receiving it but does not require him to appear in person.

The SEC Lawsuit Escalates

The SEC filed a 136-page lawsuit against Binance earlier this week, including a range of accusations related to securities violations and market manipulation. One of its claims is that Binance and CZ secretly control their American subsidiary, Binance US, even though the latter is meant to be an independent entity. The regulator filed a restraining order against Binance US, ordering to freeze all assets and repatriate customers for assets held on the platform within 10 days of receiving the order. The agency also ordered that any customer assets being held with other entities controlled by either Binance or CZ be placed back under the direct control of Binance US. It sought to have all crypto be placed in wallets with new private keys within 30 days. One of the SEC’s chief allegations was that each company commingled customer funds from both platforms across Binance and CZ-owned bank accounts at both Silvergate Bank and Signature Bank. The agency dug into great detail about this in a filing on Wednesday, with their accounting citing hundreds of millions of dollars from each platform moving through Zhao-owned firms.