![]() ![]() “The public should beware of investing any of their hard-earned assets with or on these unlawful platforms.” “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,” SEC Chair Gary Gensler said in a statement. It’s just the latest legal headache for Zhao and Binance. For years, they flouted basic know-your-customer rules by letting Americans improperly open accounts and trade, the watchdog said. In a 136-pagecomplaint filed Monday in US federal court in Washington, the SEC laid out a range of alleged violations against the world’s biggest crypto exchange and its leader. and its Chief Executive Officer Changpeng Zhao of mishandling customer funds, misleading investors and regulators, and breaking securities rules. ![]() Check back for updates.The US Securities and Exchange Commission accused Binance Holdings Ltd. In December, Reuters repor ted that Binance is being investigated by the Justice Department of over possible unlicensed money transmission and criminal sanctions violations. Several American investment firms have received subpoenas, directing them to send records of communication with Binance to the US attorney's office for the Western District of Washington in Seattle. Federal prosecutors have looked into US hedge funds' dealings with the cryptocurrency exchange, according to a Washington Post report in January. Meanwhile, the Justice Department also is investigating Binance. In March, the Commodities Futures and Trading Commission sued the company, alleging among other things that staff knew compliance efforts were just "for show" and that it was possibly facilitating transactions by Palestinian militants and Russian criminals.īinance has denied the CFTC's allegations. The SEC lawsuit is the latest legal headache for Binance. The agency requested information about Sigma Chain and Merit Peak from Binance.US, which is the subject of an existing enforcement investigation, sources told the Journal. One area of the investigation's focus was how Binance.US disclosed to customers its links to the trading firms, the report said. Sigma Chain and Merit Peak acted as market makers that trade cryptocurrencies on the Binance.US exchange. In February, the Journal reported the SEC was looking into the relationship between the US arm of Binance and two trading firms with ties to Zhao. "Simply put, today's filing is unjustified by the facts, by the law, or by the Commission's own precedent."īinance also denied any allegations that user assets on Binance.US were at risk and said all user assets on Binance and affiliates, including Binance.US, are safe and secure. All along, the objective of our engagement has been consistent: work constructively toward a clear, practical regulatory framework that enables businesses like ours to grow, create jobs, and provide American consumers safe access to digital assets," the post reads. "For nearly two and a half years, Binance.US has engaged in good faith with the SEC. Unfortunately, the SEC's refusal to productively engage with us is just another example of the Commission's misguided and conscious refusal to provide much-needed clarity and guidance to the digital asset industry."īinance.US also responded, disputing the SEC's claims in a Twitter post. "We intend to defend our platform vigorously. "While we take the SEC's allegations seriously, they should not be the subject of an SEC enforcement action, let alone on an emergency basis," Binance said. In a blog post, Binance said it was disappointed by the lawsuit, adding that it had recently been in "good-faith discussions" to reach a settlement that would've resolved the SEC's probe. The Journal added that the lawsuit has been filed in federal court in the District of Columbia. ![]()
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