The U.S. Securities and Exchange Commission (SEC) took legal action against Binance, the largest cryptocurrency exchange globally, for violating U.S. securities laws. Gary Gensler, the chairman of the SEC, revealed that Binance is facing thirteen charges related to these violations.
Binance Hit With SEC Lawsuit Over Alleged Violations of U.S. Securities Laws
faces another lawsuit as the U.S. Securities and Exchange Commission (SEC) files a case in the District of Columbia. This comes after the U.S. Commodity Futures Trading Commission (CFTC) sued Binance in late March. A press release confirms the involvement of Binance CEO Changpeng Zhao (CZ) as a defendant in the lawsuit.
Binance faces multiple securities violations as charged by the regulator, alleging that the exchange clandestinely permitted “high-value U.S. customers” to utilize the international cryptocurrency trading platform. On Monday, SEC Chairman Gary Gensler disclosed that Binance stands accused of 13 distinct charges. Furthermore, the SEC alleges that Binance commingled customer assets.
“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,” Gensler detailed. “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.”
Gensler added:
The public should beware of investing any of their hard-earned assets with or on these unlawful platforms.
Following the news, various cryptocurrency assets experienced a decline in value, with BTC and ETH registering a 2.5% decrease in the past 24 hours. Numerous other digital currencies faced even more substantial losses.
In the meantime, the SEC complaint asserts that Binance and CZ displayed a “blatant disregard” for U.S. securities laws, which encompasses operating an unregistered exchange, brokerage, and clearing house. It also involved enabling individuals to trade unregistered securities, including BNB and BUSD.
After the complaint was released CZ responded. “Our team is all standing by, ensuring systems are stable, including withdrawals, and deposits,” CZ said. “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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