The recent announcement that the United States Securities and Exchange Commission (SEC) is suing cryptocurrency exchange Binance and its Chief Executive Officer (CEO), Changpeng “CZ” Zhao, has sent shockwaves throughout the digital asset industry.
As announced, the US SEC filed a complaint in a federal court in Washington DC and listed about 13 charges against Binance, and its US subsidiary. The SEC alleges that Binance, one of the largest crypto exchanges in the world, has been operating without proper registration and has failed to comply with US securities laws.
Additionally, the SEC alleged that the crypto exchange alongside its CEO inflated its trading volume, refused to restrict U.S. customers from its platform, diverted customer funds, and misled investors regarding its market surveillance controls.
In a blog post, Binance expressed its disappointment in the complaint filed by the SEC saying that the regulator has decided to act unilaterally. As such, the exchange has promised to defend the platform no matter what it will take while cooperating with regulators and policymakers in the United States and across the globe.
CZ Assures Community Members
In a separate Tweet, CZ assured his over 8.4 million followers that the exchange has a competent team on standby to ensure that their systems are stable, including withdrawals and deposits.
4.
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
Meanwhile, this is not the first time that Binance has come under scrutiny from regulators. In 2018, the exchange left China after a government crackdown on cryptocurrencies, and it has since moved its headquarters to Malta. However, the SEC’s lawsuit represents a significant escalation in regulatory actions against Binance, and it underscores the challenging landscape facing the cryptocurrency market
Binance Gets Overwhelmed by Lawsuits
Recall that the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance and its CEO for allegedly being involved in the sales of unregistered commodity trading in the United States. This however brought customers’ lack of trust and confidence in the exchange as Binance USD (BUSD) worth about $500 million was pulled out of the exchange at the time.
Likewise, the US SEC and the New York financial regulator decided against Binance’s plan to acquire Voyager Digital’s assets citing that Binance was already faced with money laundering issues and corruption charges.
