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{"id":34167,"date":"2023-06-05T21:47:16","date_gmt":"2023-06-05T21:47:16","guid":{"rendered":"https:\/\/scienceandnerds.com\/2023\/06\/05\/sec-sues-binance-and-ceo-zhao-over-alleged-mishandling-funds-lying-to-regulators\/"},"modified":"2023-06-05T21:47:17","modified_gmt":"2023-06-05T21:47:17","slug":"sec-sues-binance-and-ceo-zhao-over-alleged-mishandling-funds-lying-to-regulators","status":"publish","type":"post","link":"https:\/\/scienceandnerds.com\/2023\/06\/05\/sec-sues-binance-and-ceo-zhao-over-alleged-mishandling-funds-lying-to-regulators\/","title":{"rendered":"SEC sues Binance and CEO Zhao over alleged mishandling funds, lying to regulators"},"content":{"rendered":"

Source:https:\/\/techcrunch.com\/2023\/06\/05\/sec-sues-binance-and-ceo-zhao-over-alleged-mishandling-funds-lying-to-regulators\/<\/a><\/br>
\nSEC sues Binance and CEO Zhao over alleged mishandling funds, lying to regulators<\/br>
\n2023-06-05 21:47:16<\/br><\/p>\n

\n

The SEC is accusing Binance, the world\u2019s 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<\/a> filed Monday. The regulator filed 13 charges against the defendants.<\/p>\n

Binance and BAM Trading were under Zhao\u2019s leadership and control and operated without registering with the SEC, the agency stated. \u201cZhao 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.\u201d<\/p>\n

However, behind the scenes, Zhao and Binance were allegedly \u201cintimately involved\u201d in directing the trading entity\u2019s business operations and providing crypto-related services to the Binance.US platform, which claims it\u2019s an independent exchange, according to the filing.<\/p>\n

The international exchange claimed in a post<\/a> on Monday it actively cooperated with the SEC\u2019s investigations and recently engaged in discussions to reach a \u201cnegotiated settlement to resolve their investigations,\u201d however the SEC \u201cabandoned that process and instead chose to act unilaterally and litigate.\u201d Separately, Binance.US tweeted<\/a> that it thinks the SEC \u201clawsuit is baseless\u201d and called for action from the crypto industry to push back against the claims.<\/p>\n

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 \u201cVIPs,\u201d who provided substantial revenue and liquidity to the platform.<\/p>\n

The filing states that in December 2018, Samuel Lim, Binance\u2019s CCO at the time, said to another compliance officer, \u201cwe are operating as a fking unlicensed securities exchange in the USA bro.\u201d<\/p>\n

The charges also included misleading investors about Binance\u2019s systems to detect and control manipulative trading; regulators say that the exchange didn\u2019t 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.<\/p>\n

\u201cToday\u2019s 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,\u201d Binance stated in its blog post. \u201cUnilaterally labeling certain tokens and services as securities \u2013 even ones over which other U.S. authorities have asserted jurisdiction \u2013 only compounds these problems.\u201d<\/p>\n

The SEC claimed that the operation was part of Binance and Zhao\u2019s plan to \u201cshield themselves from U.S. regulation.\u201d<\/p>\n

\u201cWe 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,\u201d Gurbir S. Grewal, director of the SEC\u2019s enforcement division, said in a statement.<\/p>\n

The SEC\u2019s action comes a few months after the CFTC filed<\/a> a lawsuit against Binance and Zhao<\/a> as well for allegedly evading U.S. rules by offering unregistered futures and options contracts to American traders.<\/p>\n<\/p><\/div>\n

<\/br><\/br><\/br><\/p>\n

Tech, Technology<\/br>
\n<\/br>
\nSource:
https:\/\/techcrunch.com\/2023\/06\/05\/sec-sues-binance-and-ceo-zhao-over-alleged-mishandling-funds-lying-to-regulators\/<\/a><\/br><\/br><\/p>\n","protected":false},"excerpt":{"rendered":"

Source:https:\/\/techcrunch.com\/2023\/06\/05\/sec-sues-binance-and-ceo-zhao-over-alleged-mishandling-funds-lying-to-regulators\/ SEC sues Binance and CEO Zhao over alleged mishandling funds, lying to regulators 2023-06-05 21:47:16 The SEC is accusing Binance, the world\u2019s 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 […]<\/p>\n","protected":false},"author":1,"featured_media":34168,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","om_disable_all_campaigns":false,"pagelayer_contact_templates":[],"_pagelayer_content":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[17,8],"tags":[],"class_list":["post-34167","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tech","category-technology"],"yoast_head":"\nSEC sues Binance and CEO Zhao over alleged mishandling funds, lying to regulators - Science and Nerds<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/scienceandnerds.com\/2023\/06\/05\/sec-sues-binance-and-ceo-zhao-over-alleged-mishandling-funds-lying-to-regulators\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"SEC sues Binance and CEO Zhao over alleged mishandling funds, lying to regulators - Science and Nerds\" \/>\n<meta property=\"og:description\" content=\"Source:https:\/\/techcrunch.com\/2023\/06\/05\/sec-sues-binance-and-ceo-zhao-over-alleged-mishandling-funds-lying-to-regulators\/ SEC sues Binance and CEO Zhao over alleged mishandling funds, lying to regulators 2023-06-05 21:47:16 The SEC is accusing Binance, the world\u2019s 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. 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