Current:Home > MarketsThe SEC sues Binance, unveils 13 charges against crypto exchange in sweeping lawsuit -TradeGrid
The SEC sues Binance, unveils 13 charges against crypto exchange in sweeping lawsuit
View
Date:2025-04-16 12:22:21
U.S. regulators are targeting more giants in the world of crypto.
On Monday, it filed 13 charges against Binance, which operates the world's top crypto exchange, as well as its billionaire co-founder and CEO, Changpeng Zhao, who is widely know as CZ. It's the latest in a string of actions being taken against crypto companies.
And on Tuesday, the Securities and Exchange Commission sued Coinbase, which runs the largest cryptocurrency exchange in the U.S.
Both companies are accused of failing to register with the S.E.C., which claims to have regulatory oversight of most cryptocurrencies.
In the Binance lawsuit, the S.E.C. accused Zhao and his company of misleading investors about Binance's ability to detect market manipulation as well as of misusing customer funds and sending some of that money to a company controlled by CZ, among other charges.
The S.E.C. also accused Binance of running an unregistered trading platform in the U.S. and allowing U.S. customers to trade crypto on an exchange that is supposed to be off-limits to U.S. investors.
"Through thirteen charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law," said SEC Chair Gary Gensler, in a statement. "They attempted to evade U.S. securities laws by announcing sham controls that they disregarded behind the scenes so they could keep high-value U.S. customers on their platforms."
Regulators are going after crypto companies
SEC's actions are the latest in a barrage of actions being taken by regulators against crypto companies.
So far, the biggest target has been FTX, a company that collapsed in spectacular fashion and faces a slew of criminal charges that threaten to send its founder and former CEO, Sam Bankman-Fried, to prison for over 100 years.
Gensler himself has often compared the crypto world to "the Wild West."
Binance's market share has grown dramatically since FTX went out of business, and in recent months, it has been the focus of regulators and law enforcement agencies in the U.S. and around the world.
Most recently, in March, the Commodity Futures Trading Commission, accused the company of violating the Commodity Exchange Act and several CFTC regulations.
Binance accused of not properly registering U.S. exchange
Like other large crypto companies, Binance operates products tailored to different countries and regulatory regimes.
Since 2019, Binance has run a separate exchange for customers in the United States, known as Binance.US, to comply with U.S. laws. As such, U.S.-based investors aren't supposed to use Binance's global platform, known as Binance.com.
But in today's filing, the S.E.C. says the company and its chief executive "subverted their own controls to secretly allow high-value U.S. customers" to trade on its international exchange.
Two subsidiaries, BAM Trading and BAM Management, supposedly controlled the U.S. operations independently, but according to the S.E.C., that firewall has been more permeable than the company has let on publicly.
"Zhao and Binance secretly controlled the Binance.US platform's operations behind the scenes," the agency said, in a statement.
In a statement posted on Twitter, Binance.US called the lawsuit "baseless."
"We intend to defend ourselves vigorously," the company said.
In speeches and congressional testimony, Gensler has called on crypto companies to register with the S.E.C. In today's filing, the S.E.C. says Binance failed to do that.
The defendants "chose not to register, so they could evade the critical regulatory oversight designed to protect investors and markets," the S.E.C said, in its suit.
The agency points to a message Binance's chief compliance officer sent to a colleague in 2018:
"[w]e are operating as a fking unlicensed securities exchange in the USA bro," he wrote.
veryGood! (179)
Related
- House passes bill to add 66 new federal judgeships, but prospects murky after Biden veto threat
- Bumblebee Decline Linked With Extreme Heat Waves
- Scientists zap sleeping humans' brains with electricity to improve their memory
- This Sheet Mask Is Just What You Need to Clear Breakouts and Soothe Irritated, Oily Skin
- Cincinnati Bengals quarterback Joe Burrow owns a $3 million Batmobile Tumbler
- National Eating Disorders Association phases out human helpline, pivots to chatbot
- N.C. Church Takes a Defiant Stand—With Solar Panels
- Jana Kramer Engaged to Allan Russell: See Her Ring
- John Galliano out at Maison Margiela, capping year of fashion designer musical chairs
- An abortion doula pivots after North Carolina's new restrictions
Ranking
- Scoot flight from Singapore to Wuhan turns back after 'technical issue' detected
- New Jersey to Rejoin East Coast Carbon Market, Virginia May Be Next
- Maine Town Wins Round in Tar Sands Oil Battle With Industry
- Helping a man walk again with implants connecting his brain and spinal cord
- A Mississippi company is sentenced for mislabeling cheap seafood as premium local fish
- Nordstrom Rack's Clear the Rack Sale Has $5 Madewell Tops, $28 Good American Dresses & More for 80% Off
- Vanderpump Rules' Tom Sandoval Claims His and Ariana Madix's Relationship Was a Front
- Cincinnati Bengals punter Drue Chrisman picks up side gig as DoorDash delivery driver
Recommendation
Apple iOS 18.2: What to know about top features, including Genmoji, AI updates
A new nasal spray to reverse fentanyl and other opioid overdoses gets FDA approval
Hip-hop turns 50: Here's a part of its history that doesn't always make headlines
Kim Kardashian Reacts to Kanye West Accusing Her of Cheating With Drake
Juan Soto to be introduced by Mets at Citi Field after striking record $765 million, 15
Wildfires and Climate Change
West Virginia governor defends Do it for Babydog vaccine lottery after federal subpoena
What to know about the 5 passengers who were on the Titanic sub