- The Securities and Exchange Commission (SEC) has accused Binance, the world’s largest cryptocurrency exchange, of mishandling customer funds and lying to regulators and investors.
- The SEC alleges that Binance mixed billions of dollars in customer funds and secretly sent them to a separate company controlled by Binance’s founder, Changpeng Zhao.
In a significant development in the cryptocurrency industry, the Securities and Exchange Commission (SEC) has accused Binance, the world’s largest cryptocurrency exchange, of mishandling customer funds and lying to regulators and investors. This sweeping case, filed in federal court, has sent ripples through the crypto world.
The Wall Street regulator alleges that Binance mixed billions of dollars in customer funds and secretly transferred them to a separate company under the control of Binance’s founder, Changpeng Zhao. The charges include misleading investors about the adequacy of its systems to detect and control manipulative trading. The SEC further alleges that Binance did not take sufficient steps to restrict U.S. investors from accessing Binance’s unregulated exchange.
Gurbir S. Grewal, director of the SEC’s enforcement division, stated, “We allege that Zhao and the Binance entities not only knew the rules of the road, but they also consciously chose to evade them and put their customers and investors at risk.”
The SEC has filed 13 charges against Binance and Zhao, who is better known in the crypto world as “C.Z.” This action comes a little over a month after the Commodities Futures Trading Commission filed its own civil enforcement action against Binance and Zhao.
These moves against Binance and Zhao follow the filing of criminal charges against Sam Bankman-Fried, the founder of FTX, a major rival to Binance in the crypto trading world. FTX filed for bankruptcy last November.
In conclusion, the SEC’s charges against Binance mark a significant development in the ongoing regulatory scrutiny of the crypto industry. It underscores the importance of transparency and adherence to regulatory guidelines for crypto exchanges, highlighting the potential risks for investors in this rapidly evolving industry.
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