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The United States Securities and Exchange Commission (SEC) has filed a lawsuit against Binance, one of the world\u2019s largest cryptocurrency exchanges, and its CEO, Changpeng \u201cCZ\u201d Zhao, according to an official announcement from the SEC.<\/span><\/p>\n The regulatory body is <\/span>accusing<\/span> Binance of 13 charges of disregarding many federal securities regulations, including allegations of operating an unauthorized stock exchange under Binance.com and Binance.US. The official case file further states:\u00a0<\/span><\/p>\n \u201cThis case arises from Defendants\u2019 blatant disregard of the federal securities laws and the investor and market protections these laws provide.\u201d<\/p>\n<\/blockquote>\n Despite publically stating that U.S. customers were barred from transacting on Binance.com, the SEC alleges that Zhao and \u201cBinance in reality subverted their own controls to secretly allow high-value U.S. customers to continue trading on the Binance.com platform:\u201d<\/span><\/p>\n \u201cFurther, the SEC alleges that, while Zhao and Binance publicly claimed that Binance.US was created as a separate, independent trading platform for U.S. investors, Zhao and Binance secretly controlled the Binance.US platform\u2019s operations behind the scenes.\u201d<\/span><\/p>\n<\/blockquote>\n CZ took to Twitter before the SEC published the official announcement, tweeting a \u201c4,\u201d meaning to ignore F.U.D, or fear, uncertainty, and doubt:<\/span><\/p>\n 4.<\/p>\n Our team is all standing by, ensuring systems are stable, including withdrawals, and deposits. <\/p>\n We will issue a response once we see the complaint. Haven't seen it yet. Media gets the info before we do.<\/p>\n 🙏<\/p>\n \u2014 CZ 🔶 Binance (@cz_binance) June 5, 2023<\/p>\n<\/blockquote>\n The charges extend to the manipulation of customers\u2019 assets, commingling customer funds and diverting them to Zhao\u2019s owned entity, Sigma Chain. BAM Trading and BAM Management US Holdings, companies that manage Binance.US together with Binance, are accused of misleading \u201cinvestors about non-existent trading controls over the Binance.US platform,\u201d while Sigma Chain allegedly engaged in manipulative trading practices that \u201cinflated the platform\u2019s trading volume.\u201d<\/span><\/p>\n The SEC\u2019s lawsuit, filed in the U.S. District Court for the District of Columbia, accuses the trading platforms of violating federal registration-related securities. Both Binance and BAM Trading are charged with operating unregistered national securities exchanges, broker-dealers and clearing agencies, and with the unregistered offer and sale of BNB and stablecoin Binance USD (BUSD), among other coins. The SEC holds Zhao personally liable for these alleged registration violations.<\/span><\/p>\n SEC Chair Gary Gensler warned the public to be wary of investing their assets with or on such unlawful platforms, stating in the press release:<\/span><\/p>\n \u201cThrough 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.\u201d<\/span><\/p>\n<\/blockquote>\n Gurbir Grewal, Director of the SEC\u2019s Division of Enforcement, reinforced Gensler\u2019s warnings, saying, \u201cZhao 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 \u2013 all in an effort to maximize their own profits.\u201d<\/span><\/p>\n These SEC allegations follow\u00a0<\/span>the Commodity Futures Trading Commission lawsuit against Binance<\/span>. The CFTC had targeted the crypto exchange and its CEO in March, asserting that they were knowingly facilitating the trade of unregistered crypto-derivative products within the U.S. territory, a clear violation of federal legislation. Genlser further stated:<\/span><\/p>\n \u201cDespite their years-long efforts to not \u2018be held accountable,\u2019 today\u2019s complaint begins the process of doing so.\u201d<\/p>\n<\/blockquote>\n\n
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