SEC also sues Binance
The U.S. Securities and Exchange Commission (SEC) announced today that it has filed a lawsuit against major cryptocurrency exchange Binance and its CEO Changpong Zhao (CZ).
The SEC has sued Binance and others on 13 charges, including offering unregistered securities. The lawsuit also includes its US division, Binance US. Binance, meanwhile, took the SEC’s allegations seriously, arguing that they should not be subject to regulatory enforcement, and said it would vigorously defend its platform.
Aside from the sale of unregistered securities, the SEC also misrepresented that Binance provided services such as trading and brokerage without obtaining a business license, as well as its trading management and oversight of Binance US. is also considered a problem.
For example, Binance US claims to operate independently for U.S. investors, while pointing out that CZ and Binance itself were involved in its operations. Others allege that Binance itself did not provide services to U.S. investors, but CZ and others secretly authorized trading for use by key U.S. clients.
He also pointed out that CZ and Binance diverted customer assets without separate management. He also claimed to have been using it at a company called Sigma Chain, owned and operated by CZ.
Provision of unregistered securities
Regarding the issue of unregistered securities, the SEC sees staking and other interest-earning services offered by Binance as a problem. He cited “BNB Vault” and “Simple Earn” as specific examples, pointing out that staking services were also available on Binance US. It also alleges that it did not provide investors with sufficient information about the risks and other aspects of these services.
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In addition to BNB and Binance USD (BUSD), examples of stocks that fall under securities include Solana (SOL), Ada (ADA), Polygon (MATIC), Cosmos (ATOM), and Algorand (ALGO). . In its complaint, the SEC also provides explanations for each stock.
CZ was the first to comment on Binance following the SEC lawsuit. The company explained that its system is stable, including withdrawals and deposits, and said it would make a statement as soon as it confirmed the lawsuit.
Our team is all standing by, ensuring systems are stable, including withdrawals, and deposits.
We will issue a response once we see the complaint. Haven’t seen it yet. Media gets the info before we do.
— CZ 🔶 Binance (@cz_binance) June 5, 2023
Binance itself later released a statement. The company said it has cooperated with SEC investigations and responded to SEC concerns. He recently revealed that he was in discussions with the SEC to reach a settlement over the investigation.
He said he regretted that the SEC chose to sue Binance despite its efforts. The SEC has accused it of not providing clear rules and guidance to the digital asset industry and denying a productive relationship with Binance.
Binance was also sued by the Commodity Futures Trading Commission (CFTC) in March this year, including CZ. It claims that Binance itself intentionally did not register with the CFTC and provided derivatives trading services in the United States.
connectionUS CFTC sues Binance and CZ for violating US law
The SEC lawsuit has a major impact on the cryptocurrency market. According to data from CoinGecko, the price of BNB has fallen more than 10% over a 24-hour period as of this writing.
What is Binance
Operates a major virtual currency exchange with a large number of traded stocks, trading volume, and registered users. In addition, we are developing a wide range of businesses such as the activities of the venture capital department, the provision of educational content, and philanthropic activities. In November 2010, the company announced its entry into the Japanese market.
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