The US Securities and Exchange Commission has filed a lawsuit against crypto exchange Binance and its CEO, Changpeng Zhao. The SEC alleges that Binance violated federal securities laws.
Case shock from SEC to Binance and CZ!
The US Securities and Exchange Commission (SEC) is suing crypto exchange Binance and its CEO Changpeng Zhao (CZ) on Monday for allegedly violating federal securities laws. According to various reports, the SEC claims that Binance operates an unlicensed exchange, among other things. Meanwhile, Binance is currently facing a lawsuit from the Commodity Futures Trading Commission (CFTC).
In this case, the CFTC alleges that Binance offers unregistered crypto derivatives in violation of federal law. The lawsuit filed by the SEC will add to that. Last week, an SEC representative made a statement on the subject. “We do not comment on the presence or absence of a possible investigation or enforcement action,” the official said, however. Also, spokespersons for the SEC and Binance have yet to respond to requests for comment on Monday.
Binance claims its US arm is fully independent
As you follow on Kriptokoin.com, Binance has repeatedly claimed that its US arm operates independently of Binance. Accordingly, it argued that only Binance.US employees have access to Binance.US bank accounts. But the messages Reuters reviewed reveal that Binance.US employees had to ask Chen’s team to process payments, even employee payrolls.
The report also shows that Chen signed agreements with Silvergate to act as the “Primary Admin User” for five bank accounts belonging to the US arm. These accounts include an account for institutional clients that sends funds to Merit Peak, a trading firm that was later controlled by Zhao and reportedly mixed its clients’ funds with corporate income.
Previously unreported bank records and messages show that Binance’s management of the US business’s finances extends to its bank accounts at Silvergate. It also details how this confidential access is achieved. However, Krishna Juvvadi, head of the legal department of the US arm of the crypto exchange, denied such allegations. He also said that they have had exclusive control over the exchange since its inception in 2019.
The crypto exchange giant continues to deny all allegations
The world’s largest crypto exchange by trading volume appears to be in all sorts of legal troubles in the US. The exchange is having a tough time under investigations from the SEC, IRS and the Department of Justice. However, the exchange and CZ continue to consistently deny any wrongdoing. Changpeng Zhao describes the SEC’s investigation as purely FUD against the company.
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