After the CFTC, it’s the SEC’s turn to attack Binance and its founder Changpeng Zhao (CZ).
Binance and CZ targeted by the SEC
The SEC files a complaint against Binance, the largest exchange in the world with more than 200 million customers (Binance.com).
The American subsidiary (BAM Trading Services) which manages the Binance.US exchange is also targeted. As well as Changpeng Zhao himself.
There DRY argues that Zhao and Binance did not ban US customers from trading on Binance.com contrary to what has been publicly claimed. Important American clients have secretly obtained privileges.
Although CZ and Binance have publicly stated that Binance.US is a separate entity dedicated to US investors, the SEC claims that CZ secretly controlled the operations of the Binance.US platform behind the scenes.
More concerning, Zhao and Binance would exert such control over the assets of US customers that they could “divert at will, including to an entity that Zhao owned and controlled: Sigma Chain”.
The Sigma Chain company would have ” engaged in transactions aimed at artificially inflating the volume of transactions on the exchange”. Worse still, CZ would have sent “billions of dollars of assets belonging to its clients to another company named Merit Peak, also owned by Zhao”.
Binance is further accused of failing to comply with the law regarding « securities “. Especially about BNB, BUSD tokens, some cryptocurrency lending products and staking services.
“Across thirteen counts, we allege that Changpeng Zhao and Binance Entities engaged in a vast web of deceit, conflict of interest, failure to disclose, and calculated evasion of the law”says SEC Chairman Gary Gensler.
“Zhao and Binance misled investors about their risk controls and corrupted trading volumes while actively concealing who was operating the platform, market manipulation through its affiliated market makers (Sigman Chaun and Merit Peak), and even where and with whom investor funds and assets were held. They attempted to evade US securities laws by announcing fictitious checks which they failed to comply with. »
“We allege that Zhao and Binance entities not only knew about the rules, but also knowingly chose to evade them and put their clients and investors at risk, all for the purpose of to maximize their own profits.said Gurbir S. Grewal, director of the law enforcement division.
The noose is tightening on the king of shitcoins. BNB has been in freefall since the announcement of the complaint.
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