IMPORTANT POINTS:
- The Securities and Exchange Commission decided to take legal action against the exchange and its founder on Monday.
- The US regulator filed 13 charges alleging that Binance combined billions of dollars in user funds and sent them to a European company controlled by Zhao.
- SEC Chairman Gary Gensley issued a harsh statement accusing the company and its CEO.
The Securities and Exchange Commission (SEC) launched a lawsuit against Binance and its co-founder Changpeng Zhao on Monday, accusing the exchange of combining billions of dollars in user funds and sending them to a European company controlled by Zhao.
Through 13 charges, the US regulator said Zhao and his exchange worked to subvert “their own controls” with the goal of allowing high-ranking US investors and clients to continue trading on Binance’s unregulated international exchange.
In addition, the SEC argued that “critical” provisions of federal security laws, including proprietary trading and market manipulation, were violated through Merit Peak Limited and Sigma Chain, both of which Zhao owned and controlled.
“Through thirteen charges, we allege that the Zhao and Binance entities engaged in an extensive network of deception, conflicts of interest, non-disclosure, and calculated evasion of the law,” said SEC Chairman Gary Gensler in a statement.
n response, Zhao posted a tweet putting only a “4.” This is a message to the crypto community to ignore the fear provided by regulators.
“We will issue a response once we see the complaint. The media gets the information before we do,” Zhao added.
The market reacted quickly lower after the news. In the last hour, Bitcoin was down 1.6% at $26,280, Ethereum was down 1.4% at $1,830, and XRP was down 3.4% at $0.51.
