SEC charges Binance with violating securities laws
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The largest cryptocurrency exchange in the world is accused of allowing US citizens to trade, even though the platform is not registered in the United States as a securities exchange.
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Binance CEO Changpeng Zhao during a Zoom meeting interview on Nov. 16, 2021. (AP)
The world's largest cryptocurrency exchange, Binance, was accused on Monday by US officials of breaking securities laws, which together amounted to "an extensive web of deception" and "calculated evasion of the law."
“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,” said Gurbir Grewal, director of the SEC’s enforcement division.
The SEC said that "defendants have enriched themselves by billions of US dollars while placing investors' assets at significant risk," in its complaint, which was submitted on Monday to a federal district court in Washington. According to the lawsuit, Binance allegedly made at least $11.6 billion (£9.3 billion) in income between June 2018 and July 2021, primarily from transaction fees.
Zhao, Binance Holdings, as well as two further Binance-affiliated companies, BAM Trading Services, and BAM Management US Holdings, have all been charged with the 13 civil offenses. The main Binance platform announced in 2019 that it was leaving the US market, prompting the creation of Binance for US consumers, according to the SEC.
Regarding this issue, a Binance spokesperson said: “We want to be clear that while we take the allegations in the SEC’s complaint seriously, they should not be the subject of an SEC enforcement action, let alone on an expedited basis. They are unjustified.”
News of the affected Bitcoin prices, which fell around two percent an hour after the episode made headlines.
