The US financial market watchdog, the SEC, on Monday sued the world’s largest cryptocurrency exchange platform, Binance, as well as its CEO, Changpeng Zhao, for circumventing the rules. According to the document filed in federal court in Washington, Binance in particular allowed US residents to use its platform despite the fact that the company was not registered with US authorities.
The SEC criticizes Binance for not registering its platform, its own cryptocurrencies such as BNB, or its other financial products in the United States. The regulator also claims that, contrary to what Binance has publicly claimed, the US subsidiary and the funds customers deposited there were controlled by the parent company.
“(Changpeng) Zhao and Binance entities have been guilty of a series of frauds, conflicts of interest, lack of transparency and calculated circumvention of the law,” argued the chairman of the company. SEC, Gary Gensler, quoted in a press release. “Zhao and Binance not only knew the rules, but they deliberately chose to circumvent them, putting their customers and investors at risk,” added the one that has for months adopted a criminal approach to major cryptocurrency players who fail to register. with the SEC.
The news sent Bitcoin, the main cryptocurrency by value in circulation (more than $500 billion), down nearly 2% in minutes. As for Binance Coin (BNB), cryptocurrency linked to the Binance platform and the fourth digital currency by global valuation, it lost more than 5% of its value in less than an hour.
“Our team is on deck to ensure our systems are stable, including withdrawals and deposits,” replied Changpeng Zhao from his Twitter account. “We will respond (to this subpoena) once we have seen the document,” he continued.
Industry leader
Leader of the sector, Binance had abandoned last November to acquire its competitor FTX, in turmoil since founder Sam Bankman-Fried is being prosecuted on several counts, including wire fraud, money laundering and violation of laws. A news that had caused Bitcoin prices to fall very violently. The cryptocurrency had reached its peak in 2021, rising to almost 60,000 euros, but has been falling ever since.
In April 2022, Changpeng Zhao, aka CZ, announced in our columns that he wanted to establish Binance’s European headquarters in Paris and submit to future European regulations. He had also indicated his intention to open an incubator at Station F to help Web 3 startups.
