Daily Management Review

SEC sues Binance and its Head


The Securities and Exchange Commission (SEC) sued the biggest cryptocurrency exchange Binance and its CEO Changpeng Zhao.

The Securities and Exchange Commission (SEC) has filed a case in federal court against Binance, the largest cryptocurrency exchange in the world, and its CEO, Changpeng Zhao.

The defendants are charged with 13 counts of breaking US securities laws by the commission. The list of violations includes operating unregistered exchanges, broker-dealer and clearing firms, misrepresenting control and oversight of trading on the platform, and making unregistered securities offers and sales. Zhao and Binance, according to SEC Chairman Gary Gensler, were engaged in "an extensive network of deception, conflicts of interest, failure to disclose information, and willful evasion of the law."

The SEC specifically charged Zhao and Binance with secretly assisting significant U.S. clients in trading on Binance while outwardly claiming to forbid U.S. users from doing trades. Additionally, the regulator claims that Zhao and Binance secretly ran Binance.US, a purportedly independent trading platform for American investors. The exchange has allegedly made at least $11.6 billion since July 2017, according to the commission.

The SEC further asserts that Zhao and Binance pooled and diverted consumer monies at their discretion, including to Zhao's company Sigma Chain, and hid the commingling of billions of dollars' worth of investor assets.

source: cnn.com