The SEC is accusing Binance, the world’s largest crypto exchange, its CEO Changpeng Zhao and BAM Trading and BAM Management, of lying to regulators about its operations, according to a federal suit filed Monday. The regulator filed 13 charges against the defendants.

Binance and BAM Trading were under Zhao’s leadership and control and operated without registering with the SEC, the agency stated. “Zhao and Binance created BAM Management and BAM Trading in the United States and claimed publicly that these entities independently controlled the operation of the Binance.US platform.”

However, behind the scenes, Zhao and Binance were allegedly “intimately involved” in directing the trading entity’s business operations and providing crypto-related services to the Binance.US platform, which claims it’s an independent exchange, according to the filing.

The international exchange claimed in a post on Monday it actively cooperated with the SEC’s investigations and recently engaged in discussions to reach a “negotiated settlement to resolve their investigations,” however the SEC “abandoned that process and instead chose to act unilaterally and litigate.” Separately, Binance.US tweeted that it thinks the SEC “lawsuit is baseless” and called for action from the crypto industry to push back against the claims.

The company estimated in an internal presentation from August 2019 that the platform had over 1.47 million customers in the U.S., the agency alleged. Of that total, about 3,500 were large-volume traders that the exchange referred to as “VIPs,” who provided substantial revenue and liquidity to the platform.

The filing states that in December 2018, Samuel Lim, Binance’s CCO at the time, said to another compliance officer, “we are operating as a fking unlicensed securities exchange in the USA bro.”

The charges also included misleading investors about Binance’s systems to detect and control manipulative trading; regulators say that the exchange didn’t take proper steps to restrict U.S.-based investors from accessing its platform. The SEC also alleges that cryptocurrency BNB and stablecoin BUSD are securities.

“Today’s action is another in a line of examples where, as with other crypto projects facing similar suits, the Commission has determined to regulate with the blunt weapons of enforcement and litigation rather than the thoughtful, nuanced approach demanded by this dynamic and complex technology,” Binance stated in its blog post. “Unilaterally labeling certain tokens and services as securities – even ones over which other U.S. authorities have asserted jurisdiction – only compounds these problems.”

The SEC claimed that the operation was part of Binance and Zhao’s plan to “shield themselves from U.S. regulation.”

“We allege that Zhao and the Binance entities not only knew the rules of the road, but they also consciously chose to evade them and put their customers and investors at risk,” Gurbir S. Grewal, director of the SEC’s enforcement division, said in a statement.

The SEC’s action comes a few months after the CFTC filed a lawsuit against Binance and Zhao as well for allegedly evading U.S. rules by offering unregistered futures and options contracts to American traders.