In a surprising turn of events, the United States Securities and Exchange Commission (SEC) is facing difficulty locating Binance CEO Changpeng Zhao as the regulatory body continues its legal battle against the cryptocurrency exchange. The Securities and Exchange Commission has now sought the intervention of the U.S. District Court in Washington, D.C., requesting ‘alternative service’ to serve a legal summons on behalf of Zhao.
The Securities and Exchange Commission recently filed a lawsuit against Zhao and Binance, accusing them of engaging in unregistered securities operations. However, serving the legal summons to the elusive CEO has proven to be a formidable challenge; in a document submitted to the District Court on June 7, the Securities and Exchange Commission justified its need for alternative service, citing the potential complications involved in the conventional serving method that requires the physical presence and signature of the intended recipient.
“Binance and Zhao are not the typical foreign entity and individual, as they are widely known for disagreeing with the premise of a headquarters or domicile, let alone identifying one, and Zhao is famously protective of revealing his whereabouts.”
While Zhao is not legally obligated to appear solely to respond to the summons, courts generally expect some form of service to occur, even if the defendant is not required to appear. Acknowledging this, the SEC is pressing the court for authorization to serve Zhao’s lawyers on his behalf.
SEC Faces Uphill Battle In Pursuit Of Binance CEO
The Securities and Exchange Commissions’ concerns extend beyond locating Zhao; they also revolve around understanding the financial landscape of the defendants. According to the complaint, the SEC has been unable to determine the entire scope of the defendant’s assets, the specific position of investor monies, or the status and location of any assets that may be utilized to fulfill a financial judgment against them. The logistical complexities surrounding the case further reinforce the SEC’s request for a “sworn accounting” from Zhao and Binance, demanding a comprehensive disclosure of their financial information.
Notably, the Securities and Exchange Commission points to the challenges posed by BAM Trading, the entity responsible for overseeing Binance.US in conjunction with Binance. The SEC filing suggests that BAM Trading has struggled to provide accurate information regarding Zhao’s whereabouts or the company’s location abroad. This has necessitated a sworn accounting, as the SEC aims to unravel the intricate financial web surrounding Zhao and Binance.
At the time of publication, Zhao’s current location remains a mystery. The Chinese-born Canadian citizen reportedly purchased a residence in Dubai in 2021. However, according to Binance spokesperson Dewy Mustajab, as of March 28, 2023, Zhao divides his time between Dubai and France, making it even more challenging for the Securities and Exchange Commission to serve him personally.