SEC can’t find Binance CEO Changpeng Zhao, asks court for ‘alternative service’

The U.S. Securities and Exchange Commission (SEC) is requesting the U.S. district court in Washington, D.C. to utilize an “alternative service” to deliver a legal summons to Changpeng Zhao, the CEO of cryptocurrency exchange Binance.

Zhao and Binance have recently been taken to court by the SEC for purportedly conducting unregistered securities operations.

The SEC is taking legal action against Coinbase for violating US securities regulations.

In a filing with the district court on June 7, the SEC asked for an alternative to the usual service, citing that it might be difficult to achieve in this case.

Despite the reported difficulty in serving Zhao, the CEO would not necessarily need to appear in court in response to the summons; however, the courts usually require some kind of service to take place even if the defendant is not obligated to be present.

The SEC additionally petitioned the court to require Zhao and Binance to immediately present a “sworn accounting” – basically a legal revelation of financial details.

According to the complaint, the SEC has not been able to ascertain the total value of the defendants’ assets, the precise location of the investors’ funds, or the condition and position of any other assets that could be used to fulfill a financial award against the defendants.

Once more, the SEC noted the logistical issues as factors that lessen the severity of the situation. The filing indicated that the demand for a sworn accounting was due to “BAM Trading’s incapacity to give precise information” concerning Zhao’s whereabouts or the firm’s “presence overseas.”

BAM Trading is the organization that works in tandem with Binance to manage Binance.US, a separate entity from the other Binance entities that operates in the United States.

At the time of publication, Zhao’s whereabouts were still unknown. A Chinese-born Canadian citizen, he is said to have purchased a residence in Dubai in 2021. Nevertheless, as of March 28, 2023, according to a Binance spokesperson Dewi Mustajab, the CEO divides his time between Dubai and France.