US SEC sues Binance and founder Changpeng Zhao for breaking securities rules
- The agency is accusing the world’s largest crypto exchange of operating a ‘web of deception’, sending bitcoin to its lowest in nearly three months
- The move is the latest in a series of legal woes for Binance, which was also sued by the US Commodity Futures Trading Commission over compliance issues
US regulators sued Binance and its CEO Changpeng Zhao on Monday for allegedly operating a “web of deception”, piling further pressure on the world’s biggest cryptocurrency exchange and sending bitcoin to its lowest in almost three months.
The Securities and Exchange Commission (SEC) complaint, filed in a federal court in Washington, listed 13 charges against Binance, Zhao and the operator of its purportedly independent US exchange.
The SEC alleged that Binance artificially inflated its trading volumes and diverted customer funds, as well as failed to restrict US customers from its platform and misled investors about its market surveillance controls.
The SEC also claimed that Binance and Zhao, its billionaire founder and one of the cryptocurrency industry’s highest profile moguls, secretly controlled customers’ assets, allowing them to commingle and divert investor funds “as they please”.
Binance created separate US entities “as part of an elaborate scheme to evade US federal securities laws”, the SEC also alleged, citing a number of practices first reported by Reuters in a series of investigations into the exchange published this year and in 2022.