The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Binance.US, Binance Global, and Binance founder and CEO Changpeng Zhao on Monday, alleging a host of compliance and control failures. The SEC is also seeking a temporary restraining order to freeze assets tied to Binance.US.
The SEC alleges that Binance allowed two companies tied to Zhao, Sigma Chain and Merit Peak, to access “billions of U.S. dollars” of customer funds held by BAM Trading. The SEC also alleges that Binance failed to register as a securities exchange, failed to implement adequate safeguards to protect customer funds, and failed to provide accurate information to investors.
The SEC’s lawsuit is the latest in a series of regulatory challenges facing Binance. In May, the Financial Conduct Authority (FCA) of the United Kingdom ordered Binance to stop offering services to UK customers.
In September, the Japanese Financial Services Agency (FSA) ordered Binance to stop providing crypto derivatives services to Japanese customers.
The SEC’s lawsuit is a major setback for Binance as the company has been one of the most popular crypto exchanges in the world, but it has faced increasing scrutiny from regulators in recent months. The SEC’s lawsuit could have a significant impact on Binance’s business and could lead to further regulatory action against the company.
The SEC is seeking a temporary restraining order to freeze assets tied to Binance US. This would prevent Binance from accessing customer funds and would prevent the company from destroying any records related to the case. The SEC is also seeking a preliminary injunction, which would prevent Binance from continuing to operate in the United States.
Binance has denied the allegations in the SEC’s lawsuit. The company said that it “will vigorously defend itself against these meritless claims.”
The SEC’s lawsuit is a major development in the regulation of cryptocurrency exchanges and could have a significant impact on the future of the crypto industry.
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