US Securities and Exchange CommissionSEC, in English) sued Binance, the world’s largest cryptocurrency platform, on Monday, for violating a number of rules in the country by their actions.
The lawsuit filed in federal court in Washington accuses the company of mismanaging its users’ funds and lying to investors and regulators, among other things.
The SEC filed a total of 13 charges against Binance and against its founder, Changpeng Zhao, whom he accuses of blatant disregard for US stock market laws. and earn billions of dollars in exchange for putting their clients’ assets at “significant risk.”
“Zhao and the divisions of Binance not only knew about the rules, but they deliberately chose to evade them and put their customers and investors at risk in an attempt to maximize their own profits,” said Binance Chairman Gary Gensler.
In a 136-page lawsuit, the SEC condemns that Binance illegally offered to buy and sell crypto assets in the US on platforms not registered in the country and lied about its alleged surveillance and control systems.
In addition, it ensures that the company mismanaged clients’ funds, even diverting them without their knowledge to another independent firm, but also controlled by Zhao.
According to Gensler, the Chinese-born billionaire and Binance have created “a wide network of deceit, conflicts of interest, cover-ups, and willful evasion of the law.”
The case opened by the SEC has been settled civilly, but some of the charges are similar to those that led to the collapse of the FTX cryptocurrency platform and the criminal charges against its founder Sam Bankman-Freed, such as the alleged use of client funds to finance other operations.
In this case, some of the clients’ money was transferred without their knowledge to FTX’s investment arm, Alameda Research. The lawsuit alleges that more than $20 billion has flowed through Merit Peak, an investment firm controlled by Zhao, since Binance began operating in the US.including user funds.
Via Twitter, Zhao said the company will provide a response to the lawsuit as soon as it has time to look into it, and said it has taken steps to ensure the stability of all systems, including withdrawals and deposits.
After today’s demand became known, there was a clear drop in the cryptocurrency markets, especially for Binance Coin (BNB). which lost almost 9%, but also for other important assets such as bitcoin and ethereum, which remained between 3% and 4%.
The lawsuit filed this Monday by the SEC adds to another filed last March by the Commodity Futures Trading Commission (CFTC), which regulates the futures and options markets and accused the company of “multiple violations” of financial and regulatory standards in the country.
Founded in China in 2017, Binance left the Asian country before the Chinese government enacted regulations on cryptocurrencies and opened its headquarters in the Cayman Islands, although it has subsidiaries that operate in many countries.
Zhao, a Chinese citizen but a Canadian citizen, was ranked 19th on Forbes’ 2022 list of the world’s richest people.
(EFE)
Source: Aristegui Noticias
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
