A U.S. district court has issued a summons for the crypto exchange Binance's CEO, Changpeng Zhao (CZ). The move came nearly two days after the U.S. Securities and Exchange Commission (SEC) filed a 136-page complaint against Binance and CZ over U.S. law violations with 13 charges. It is currently not clear whether the summons is officially served or not. - After the document is served, Zhao will have 21 days to respond to the summons, though he does not have to appear in court in person.
- If CZ fails to respond, he will be subject to judgment by default for the remedy sought in the SEC's lawsuit.
- The allegations in the U.S. regulator's complaint include mishandling customer funds, misleading investors and regulators, violating securities laws, creating an extensive web of deception, conflicts of interest, lack of disclosure, wash trading, and calculated evasion of the law.
- At the time, Binance defined the complaint as disappointing, adding that they intend to defend the platform vigorously.
- The SEC also recently filed an emergency action application for a temporary restraining order, requesting the court to freeze the assets of crypto exchange Binance's U.S. arm, Binance.US.
The exchange is similarly under scrutiny by the Commodity Futures Trading Commission (CFTC), the Internal Revenue Service (IRS), and federal prosecutors in the U.S., mainly due to compliance issues. - Meanwhile, rival crypto exchange Coinbase was also recently sued by the SEC over alleged U.S. securities law violations.
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