- June 5, 2023
- Posted by: admin
- Category: BitCoin, Blockchain, Cryptocurrency, Investments
The New York Times has reported that Binance, one of the world’s largest cryptocurrency exchanges, and its Chief Executive Officer (CEO) Changpeng Zhao, are facing accusations of breaking US securities rules. The allegations were made in a federal court filing by the Securities and Exchange Commission (SEC), which alleges that Binance has been operating an unregistered securities exchange.
Binance Faces Legal Heat
Furthermore, the SEC accused the exchange of mishandling customer funds and lying to regulators and investors about its operations. The charges include secretly mixing “billions of dollars” in customer funds and sending them to a separate company controlled by Binance’s founder, Changpeng Zhao, as well as misleading investors about the adequacy of its systems to detect and control manipulative trading. Regulators also accuse Binance of failing to sufficiently restrict US investors from accessing its unregulated exchange.
Moreover, The SEC has filed 13 charges against Binance and Zhao, known as “C.Z.” in the crypto world. The regulator’s action comes just over a month after the Commodities Futures Trading Commission filed its civil enforcement action against Binance and Zhao. Gurbir S. Grewal, director of the SEC’s enforcement division, stated:
We allege that Zhao and the Binance entities not only knew the rules of the road, but they also consciously chose to evade them and put their customers and investors at risk
Changpeng Zhao quickly responded to the recent SEC complaint against the company, stating that its team is working to ensure that its systems remain stable, including withdrawals and deposits. He also noted that the company has not yet seen the complaint and that the media has access to information before Binance does.
In previous months, Binance denied these allegations, stating that the company “takes its legal obligations very seriously and engages with regulators and law enforcement collaboratively.”
At this point, it remains to be seen how the SEC’s complaint will impact the exchange’s operations and reputation. However, Zhao’s statement suggests that the company is taking the matter seriously and is committed to working with regulators to address any concerns they may have.
Featured image from iStock, chart from TradingView.com