The us securities and exchange commit (sec) Filed a laWSUIT aginst binance, its us platform, and CEO Changpeng zhao (CZ) in distribution of the distribution of the distribution of Columbia on June 5. US regulators charge binance with 13 counts, including unregister bnb offers and Sales Binance Coin and Binance USD Tokens, Simple Earn and BNB Vault products and their staking program. Additionally, Binance failed to register its Binance.com platform as an exchange or broker-dealer clearinghouse, the SEC said in the lawsuit. Additionally, it clai ms that Binance and BAM Trading the legal entity of Binance.US failed to register Binance.US as an exchange, broker, and clearinghouse. CZ was sued as a "controlling person".
According to the lawsuit: “Defendants have enriched themselves with billions of dollars while placing investors’ assets at significant risk. Defendants participated in multiple unregistered offerings and sales of cryptoasset securities and other investment schemes.” It continued, "Defendants BAM Trading and BAM Management defrauded stock, retail, and institutional investors by claiming to have oversight and control over manipulative trading on the Binance.US platform, when in reality those platforms barely exist."
The allegations behind these allegations include that Binance failed to restrict the use of Binance.com by US investors, and that Binance.US engaged in wash trading through its “principally undisclosed 'market maker' trading firm, Sigma Chain,” which is owned by CZ. Additionally, the suit allegations that funds from Binance and Binance.US were mixed in an account controlled by CZ-linked Merit Peak Limited. The allegations echo a complaint filed by the CFTC on March 27. CZ denied the allegations in a detailed blog post.
SEC Chairman Gary Gensler said in a statement: “As alleged, Zhao and Binance misled investors about their risk controls and trading volumes, while actively concealing who was running the platform, manipulate trading by its affiliated market makers, and even concealing investors funds and crypto The custody location and custodian of the assets.”
The SEC demanded a permanent ban on Binance and CZ from further activities, forfeiture of ill-gotten gains as well as interest and penalties. The lawsuit claims that tokens traded on the Binance exchange are securities. These tokens are BNB, BUSD, Solana, Cardano , Polygon, Filecoin, Cosmos, Sandbox, Decentraland, Algorand, Axie Infinity, and Coti. Binance and Binance.US responded to the lawsuit separately. Binance.US said in a tweet that the SEC's claims were its “latest example of enforcement oversight. ” The lawsuit is “baseless and we intend to vigorously defend ourselves,” it continued.
In a blog post on Binance.com, the company wrote: “From the outset, we have actively cooperated with the SEC's investigation and worked diligently to answer their questions and address their concerns. While we take the SEC's allegations seriously, they should not be The subject of SEC enforcement action, much less Needless to say in an emergency."
“Any allegations that user assets on the Binance.US platform are at risk is false,” Binance.com added. The latter do not appear to be a top priority for the SEC.”
The allegations against Binance are not new. The SEC investigation into Binance reportedly began in June 2022. Binance called reports of fund mismanagement a "conspiracy theory."
