The United States Securities and Exchange Commission (SEC) filed charges against Binance, its U.S.-based exchange platform and its CEO Changpeng Zhao for violating American securities laws.
On June 5, SEC filed 13 charges against Binance in the District Court of Columbia over allegations that the company misled investors and misused customer funds. The accusations of mishandling customers’ funds and violations of U.S. banking regulations were first flagged in a report published by Reuters in the last week of May. At the time, Binance had refuted all the allegations and called the report a list of conspiracy theories.
According to the regulator, Binance has been mixing “billions of dollars” in user assets and covertly moving them to a different firm under CZ’s control. The accusations included misrepresenting to investors the effectiveness of the company’s mechanisms for identifying and preventing manipulative trading.
Regulators further alleged that Binance had not done enough to prevent American investors from using its unlicensed exchange. Some of the key allegations in the lawsuit include:
- Zhao and Binance secretly controlled the Binance US platform’s operations behind the scenes.
- Zhao and Binance exercise control of the platforms’ customers’ assets, permitting them to commingle customer assets.
- BAM Trading (the entity that…
