The U.S. Securities and Exchange Commission (SEC);has filed;a 136-page complaint against Binance, the largest crypto exchange by trading volume, and its;CEO;Changpeng Zhao (CZ) over U.S. law violations.;
The allegations in the 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.;
The regulator asked the court to freeze Binance's assets and appoint a receiver.
- In the lawsuit, the;SEC;also claimed that many tokens traded on Binance, including Binance Coin (BNB), Binance USD (BUSD), Solana (SOL), Cardano (ADA), Polygon (MATIC), The Sandbox (SAND), Decentraland (MANA), and Algorand (ALGO), were improperly offered and sold as;securities.
- Further, the agency said the exchange's U.S. arm, Binance.US, has hidden ties with Binance, and they operate as an exchange, broker-dealer, and clearing agency without registering with the SEC.
- The U.S. regulator added that Binance mixed customer funds with its own assets, sending billions of dollars of those funds to a bank account controlled by Zhao before;transferring them to a third party and using them to trade crypto.
- Binance defined the complaint as disappointing and said the SEC was not able to provide clarity over rules for digital assets, adding that they intend to defend the platform vigorously.;
- Within the first 24 hours of the complaint, the popular crypto exchange experienced;nearly $790M;of withdrawals.
The SEC's complaint;followed a lawsuit;filed by the U.S. Commodity Futures Trading Commission (CFTC) in March against Binance and CZ with allegations of regulatory violations in seven counts.
- The exchange has also been under scrutiny by the Internal Revenue Service (IRS) and federal prosecutors in the U.S., mainly due to compliance issues.