(MENAFN) On Monday, the US Securities and Exchange Commission (SEC) made an announcement that cryptocurrency trading platform Binance, along with its founder and CEO Changpeng Zhao, is being sued for alleged violations of several US securities laws. The SEC has brought forth a total of 13 charges against Binance entities and Zhao, including accusations of operating unregistered exchanges, broker-dealers, and clearing agencies. Additionally, the charges involve claims of misrepresenting trading controls and oversight on the Binance.US platform, as well as the unregistered offer and sale of securities.
The SEC alleges that despite public claims made by Zhao and Binance that American customers were prohibited from conducting transactions on Binance.com, they secretly circumvented their own controls to allow high-value US customers to continue trading on the Binance.com platform. Furthermore, the regulator asserts that although Zhao and Binance publicly presented Binance.US as a separate and independent trading platform exclusively for American investors, they exerted covert control over the platform's operations.
In a statement, SEC Chair Gary Gensler expressed the extent of the allegations against Zhao and Binance, citing an intricate web of deception, conflicts of interest, lack of disclosure, and deliberate evasion of the law. The SEC's legal action underscores its commitment to enforcing securities regulations within the cryptocurrency space and holding individuals and entities accountable for any violations.
The lawsuit against Binance and its CEO comes amid a growing focus on regulatory scrutiny of the cryptocurrency industry. As cryptocurrencies continue to gain prominence and attract a larger investor base, regulatory bodies are intensifying their efforts to ensure compliance and protect investors. The outcome of this case will not only have implications for Binance and Zhao but may also serve as a precedent for the broader cryptocurrency market, influencing regulatory frameworks and investor confidence in the sector.
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