SEC Sues Binance and CEO Changpeng Zhao for Securities Law Violations

SEC Sues Binance and CEO Changpeng Zhao for Securities Law Violations

The U.S. Securities and Exchange Commission is suing crypto exchange Binance and its CEO, Changpeng "CZ" Zhao on allegations of violating federal securities laws on Monday.

The SEC filed 13 charges against Binance, alleging it operated an unlicensed exchange, controlled and commingled customer assets, offered unregistered securities (including $BNB and $BUSD), among other issues.

SEC Chair Gary Gensler said, "Through thirteen charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law. As alleged, Zhao and Binance misled investors about their risk controls and corrupted trading volumes while actively concealing who was operating the platform, the manipulative trading of its affiliated market maker, and even where and with whom investor funds and crypto assets were custodied. They attempted to evade U.S. securities laws by announcing sham controls that they disregarded behind the scenes so that they could keep high-value U.S. customers on their platforms. The public should beware of investing any of their hard-earned assets with or on these unlawful platforms.”

This lawsuit comes as a further blow to Binance, following previous allegations earlier this year. In March, the U.S. regulator Commodity Futures Trading Commission (CFTC) accused Binance and Changpeng Zhao of knowingly offering unregistered cryptocurrency derivatives products in the United States.

In a tweet, CZ tweeted "4," essentially calling the news "fud," (for fear, uncertainty and doubt). He said, "Our team is all standing by, ensuring systems are stable, including withdrawals, and deposits. We will issue a response once we see the complaint. Haven't seen it yet. Media gets the info before we do."

 

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Source

Binance

Policy and Regulation

SEC

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