September 21, 2023

US SEC sues Binance and founder Changpeng Zhao

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2 minutes.

US SEC sues Binance and founder Changpeng Zhao

US Securities and Exchange Commission (SEC)accused the world's largest cryptocurrency exchange and its founder of creating a "network of deception", inflating trading volume, diverting clients' assets and trading unregistered securities.

The SEC went to court in the District of Columbia, publiclystating on Monday, June 5 that the administration of Binance and its CEO Changpeng Zhao personally failed to restrict access to their trading platform to US clients, and also “distorted critical information, thereby misleading investors regarding their funds market control."

“Based on the thirteen counts of the charges, weWe allege that Changpeng Zhao and Binance have engaged in a vast network of investor fraud, conflicts of interest, non-disclosure, and willfully evaded law enforcement,” SEC Chairman Gary Gensler announced.

The SEC, in a 136-page lawsuit, accuses Binance of numerous violations of federal securities law and trading in non-registered securities.

The SEC classifies unregistered securities asSolana (SOL), Cardano (ADA), Polygon (MATIC), Coti (COTI) and Algorand (ALGO) blockchain tokens, Filecoin (FIL), Cosmos hub (ATOM), Sandbox (AXS), Axie infinity and Decentraland ( MANA).

The Commission insists on revealing the facts of the actual management of the operations of the American platform Binance.US, despite assurances
Changpeng Zhao on the complete independence of the site fromparent crypto exchange. The authors of the lawsuit are asking the district court to order the freezing of Binance's assets, as well as seize all possible documents and accounting papers in order to prevent the destruction of evidence.

Previously to Binance and its CEOChangpeng Zhao has been charged by the Commodity Futures Trading Commission (CFTC) with possible evasion of federal laws and operating an unregistered digital asset derivatives exchange.