[NEWS] US SEC files lawsuit against Binance and CEO CZ, dealing a blow to the cryptocurrency market

On the 5th, the US Securities and Exchange Commission (SEC) announced that it had filed a lawsuit against major cryptocurrency exchange Binance and its CEO Changpeng Zhao (CZ).

The SEC filed a lawsuit on 13 charges alleging that Binance and CZ violated various securities laws.

Following this announcement, the cryptocurrency market has seen a general decline, especially in major stocks. Bitcoin (BTC) fell 4% from the previous day, Ethereum (ETH) fell 3% from the previous day, and Binance Coin (BNB), Binance's own cryptocurrency, fell 9% from the previous day.

In its complaint, the SEC claims that Binance was operating an exchange without registration, and that while it did not provide its own services to US users, it actually allowed important customers to trade in secret.

The complaint also alleges that Binance and CZ misappropriated customer assets without segregating them, and that the funds were used by an entity called Sigma Chain, which he owned and controlled.

The complaint also alleges that Binance provided users with unregistered securities, including Binance Coin, Binance USD (BUSD), Solana (SOL), Polygon (MATIC), Ada (ADA), Algorand (ALGO), Axie Infinity (AXS), and Cosmos (ATOM).

SEC Chairman Gary Gensler said, "Through our 13-count complaint, we allege that Binance and CZ engaged in widespread deception, conflicts of interest, lack of disclosure, and deliberate evasion of the law," and sharply criticized the company for "concealing who was operating the exchange, the manipulative trading of its affiliated market makers, and even where and who was storing investor funds and crypto assets."

He continued, "In order to keep U.S. users on their platform, Binance secretly announced false internal regulations and circumvented U.S. securities laws. Binance and CZ have chosen to intentionally circumvent regulations and put users and investors at risk in order to maximize their own profits."

In response to the SEC's action, Binance released a statement saying, "We regret the SEC's charges." It maintained that it has actively cooperated with the SEC's investigation from the beginning and worked to address the concerns.

In its statement, Binance said, "Until recently, we had been negotiating to resolve the matter and engaged in good faith discussions to reach a settlement. With today's complaint, the SEC has abandoned that process and chosen to unilaterally sue. We take the SEC's allegations seriously, but its enforcement action is wrong," criticizing the SEC's response.

It said it will work hard to protect its platform and will fight the SEC to win clear guidance the cryptocurrency industry desires.

Reference:SEC,Binance
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