The US Securities and Exchange Commission (SEC) has filed a suit against the world’s largest cryptocurrency exchange, Binance, and its Founder and Cheif Executive Officer (CEO) Changpeng Zhao, accusing them of risking billions of dollars worthy of user funds and sending them to a European company controlled by Zhao.
The US authorities have made Thirteen civil complaints against Zhao, Binance Holdings, and two other Binance-affiliated companies, BAM Trading Services and BAM Management US Holdings.
According to these accusations, Zhao and his exchange conspired to undermine “their controls” so that high-net-worth American investors and clients may continue trading on Binance’s unregulated foreign exchange while feigning restrictions on US customers using Binance.com. Zhao and Binance managed the Binance US platform’s activities behind the scenes.
In addition, “Defendants have enriched themselves by billions of US dollars while placing investors’ assets at significant risk,” according to the lawsuit submitted Monday to a federal district court in Washington.
The SEC said that despite federal law prohibiting the unregistered offer and sale of securities, Binance was aware that tens of thousands of its customers were in the United States yet did nothing.
According to the allegations, Binance earned at least $11.6 billion in revenue between June 2018 and July 2021.
The SEC also charged Binance and BAM Trading with operating unregistered securities exchanges, broker-dealers and clearing agencies, and the unregistered offering and sale of crypto assets.