{"id":21411,"date":"2023-06-06T03:50:15","date_gmt":"2023-06-06T03:50:15","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/sec-targets-binance-in-landmark-lawsuit-over-securities-violations\/"},"modified":"2023-06-06T03:50:15","modified_gmt":"2023-06-06T03:50:15","slug":"sec-targets-binance-in-landmark-lawsuit-over-securities-violations","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/sec-targets-binance-in-landmark-lawsuit-over-securities-violations\/","title":{"rendered":"SEC Targets Binance in Landmark Lawsuit over Securities Violations"},"content":{"rendered":"

(Originally posted on : Crypto News – iGaming.org )<\/b>
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The U.S. Securities and Exchange Commission (SEC) has charged leading crypto exchange Binance<\/a>, its U.S. subsidiary Binance.US, and founder Changpeng \u201cCZ\u201d Zhao, alleging numerous violations of federal securities laws. The accusations revolve around the trio\u2019s provision of unregistered securities<\/a> \u2013 specifically, the BNB token and Binance-linked BUSD stablecoin. The suit also claims that Binance\u2019s staking service breached securities law.<\/p>\n

The lawsuit extends its reach to BAM Trading, the company that operates Binance.US. Both BAM Trading and Binance are charged with failing to register as a broker, clearing agency, and exchange. The SEC is further concerned with the alleged mixing of customer funds and Zhao\u2019s \u201csecret\u201d control over Binance.US.<\/p>\n

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A Twist in the US Customer Narrative<\/h2>\n

The SEC accused Binance of falsely claiming non-service to U.S. persons, despite knowingly allowing them to trade on its platform. The suit alleges, \u201cWhen the Binance.US Platform launched in 2019, Binance announced that it was implementing controls to block U.S. customers from the Binance.com Platform. In reality, Binance did the opposite.\u201d Allegedly, Zhao directed Binance to discreetly assist some high-value U.S. customers in evading these controls.<\/p>\n

The SEC\u2019s claim of unregistered securities goes beyond BNB tokens and BUSD stablecoin, extending to native coins for a variety of blockchains including Solana (SOL), Cardano (ADA), Polygon (MATIC), Coti (COTI), and Algorand (ALGO), Filecoin (FIL), Cosmos (ATOM), Sandbox (SAND), Axie Infinity (AXS), and Decentraland (MANA).<\/p>\n

Alleged Financial Missteps<\/h2>\n

Accusations of financial mismanagement have been raised<\/a>, including the diversion of customer funds for potentially personal uses. According to the SEC, entities controlled by Zhao, such as Merit Peak Limited and Sigma Chain, had vast access to customer funds, with Sigma Chain allegedly receiving almost $200 million from BAM Trading. The suit also alleges CZ himself \u201cpersonally received $62.5 million from one of the Binance bank accounts\u201d between October 2022 and January 2023.<\/p>\n

The suit provides insights into Binance\u2019s complex corporate structure, wherein Zhao allegedly holds 100% ownership of a chain of entities that ultimately control Binance.US. The SEC documents suggest U.S. executives felt restricted by the control exerted by CZ and global Binance officials.<\/p>\n

Brian Brooks, former Binance.US CEO<\/a>, reportedly stated, \u201cI realized, huh, I\u2019m not actually the one running this company, and the mission that I believe I signed up for isn\u2019t the mission. And as soon as I realized that, I left.\u201d This sentiment echoed the experience of Catherine Coley, Binance.US\u2019s first CEO, who was identified in the suit as \u201cCEO A\u201d and reported that her \u201centire team is at their breaking point.\u201d<\/p>\n

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The SEC suit raises additional concerns, such as Binance\u2019s access to Binance.US\u2019s assets and private keys, and internal discussions about enabling U.S. customers to trade on binance.com.<\/p>\n

In response to the allegations, Binance.US issued a statement, calling the suit \u201cthe latest example of regulation by enforcement,\u201d and labelling the suit as \u201cbaseless.\u201d They insisted that user assets on their platform have always been secure, and vowed to \u201cvigorously defend against the SEC\u2019s overreach.\u201d<\/p>\n<\/p><\/div>\n

Source link <\/a>
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(Originally posted on : Crypto News – iGaming.org ) The U.S. Securities and Exchange Commission (SEC) has charged leading crypto exchange Binance, its U.S. subsidiary Binance.US, and founder Changpeng \u201cCZ\u201d Zhao, alleging numerous violations of federal securities laws. The accusations revolve around the trio\u2019s provision of unregistered securities \u2013 specifically, the BNB token and Binance-linked […]<\/p>\n","protected":false},"author":5,"featured_media":21412,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[34],"tags":[],"_links":{"self":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/21411"}],"collection":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/comments?post=21411"}],"version-history":[{"count":0,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/21411\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media\/21412"}],"wp:attachment":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media?parent=21411"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/categories?post=21411"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/tags?post=21411"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}