Market players said the SEC's allegations could hobble Binance, with the lawsuit likely to reverberate through the crypto industry. Binance's own cryptocurrency BNB, the world's fourth-largest by market size, dropped more than 5%. exchange, the SEC's actions are limited in reach."īinance.US, which is ultimately controlled by Zhao, said in a tweet that the lawsuit was "unjustified by the facts, by the law, or by the Commission's own precedent."īitcoin, the world's biggest cryptocurrency, fell as much as 6% on the news to its lowest in almost three months.
In a blog post, Binance said: "We intend to defend our platform vigorously," adding that "because Binance is not a U.S. "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," SEC Chair Gary Gensler said in a statement. Sigma Chain spent $11 million from an account on a yacht, the SEC said.
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federal securities laws," the SEC also alleged, citing a number of practices first reported by Reuters in a series of investigations into the exchange published this year and in 2022.įrom almost three years ago until June 2022, a trading firm owned and controlled by Zhao, Sigma Chain, engaged in so-called wash trading that artificially inflated the trading volume of crypto asset securities on the Binance.US platform, the SEC also alleged. entities "as part of an elaborate scheme to evade U.S. The SEC also claimed that Binance and Zhao, its billionaire founder and one of the crypto industry's highest-profile moguls, secretly controlled customers' assets, allowing them to commingle and divert investor funds "as they please."īinance created separate U.S. customers from its platform and misled investors about its market surveillance controls. The SEC alleged that Binance artificially inflated its trading volumes, diverted customer funds, failed to restrict U.S.
The Securities and Exchange Commission (SEC) complaint, filed in a federal court in Washington, D.C., listed 13 charges against Binance, Zhao and the operator of its purportedly independent U.S.
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