Current:Home > ContactSEC sues crypto giant Binance, alleging it operated an illegal exchange -MarketLink
SEC sues crypto giant Binance, alleging it operated an illegal exchange
View
Date:2025-04-13 08:23:40
The U.S. Securities and Exchange Commission on Monday sued Binance and its CEO, Changpeng Zhao, alleging the cryptocurrency company was effectively operating an illegal exchange and diverted investors' funds into a trading entity controlled by Zhao.
The lawsuit, filed Monday in federal court in Washington, D.C., claims Binance ran its trading operations without registering with the SEC, as required by law, in order to "evade the critical regulatory oversight" aimed at protecting investors and markets.
Binance, the world's largest crypto-currency exchange, allegedly commingled and diverted customers' assets, steps that registered financial firms wouldn't be able to do, the agency claims. The SEC also charges that Zhao and Binance redirected "billions of U.S. dollars of customer funds" into an account controlled by Zhao.
"Defendants' purposeful efforts to evade U.S. regulatory oversight while simultaneously providing securities-related services to U.S. customers put the safety of billions of dollars of U.S. investor capital at risk and at Binance's and Zhao's mercy," the lawsuit claims.
The lawsuit also alleges Binance defrauded customers by claiming they had controls in place to monitor "manipulative trading."
In an emailed comment to CBS MoneyWatch, Binance called the SEC's actions "unjustified."
The lawsuit "comes after extensive cooperation and recent good-faith negotiations," Binance said . "We are disappointed that the SEC chose to file a complaint today against Binance seeking, among other remedies, purported emergency relief. We now join a number of other crypto projects facing similarly misguided actions from the SEC and we will vigorously defend our business and the industry."
The charges against Binance echo some of the allegations against another cryptocurrency exchange, FTX Trading. In that case, FTX co-founder Sam Bankman-Fried was charged with violations of securities laws, with the SEC alleging that he commingled FTX customers' funds into a venture he controlled. In that case, Bankman-Fried allegedly used the customer funds to buy real estate and make investments and political purchases.
Binance didn't specifically address the SEC's allegations of commingling and diverting customers' funds, but said it objected to the agency's claim that it was operating as an unregistered securities exchange.
"Because of our size and global name recognition, Binance has found itself an easy target caught in the middle of a U.S. regulatory tug-of-war," the company said.
- In:
- SEC
- Cryptocurrency
veryGood! (461)
Related
- Residents worried after ceiling cracks appear following reroofing works at Jalan Tenaga HDB blocks
- Modern Family Alum Ariel Winter Responds to Claim Boyfriend Luke Benward Is Controlling
- Mississippi Senate blocks House proposal to revise school funding formula
- When is the next total solar eclipse in the U.S. after today? See the paths for the 2044 and 2045 events
- How to watch the 'Blue Bloods' Season 14 finale: Final episode premiere date, cast
- Idaho teen faces federal terrorism charge. Prosecutors say he planned to attack a church for ISIS
- Committee recommends against impeachment for Vermont sheriff charged with assault
- Former hospital IT worker pleads guilty to 3-decade identity theft that led to his victim being jailed
- Buckingham Palace staff under investigation for 'bar brawl'
- Billy Dee Williams thinks it's fine for actors to wear blackface: 'Why not?'
Ranking
- Selena Gomez engaged to Benny Blanco after 1 year together: 'Forever begins now'
- Robert Downey Jr. Reveals Honest Reaction to Jimmy Kimmel's 2024 Oscars Joke
- Special counsel pushes Supreme Court to reject Trump's bid for sweeping immunity in 2020 election case
- Committee recommends against impeachment for Vermont sheriff charged with assault
- Skins Game to make return to Thanksgiving week with a modern look
- Georgia prosecutor promises charges against driver who ran over 4-year-old girl after police decline
- Secretary Yellen meets with Chinese Premier Li in Beijing: We have put our bilateral relationship on more stable footing
- NAIA approves transgender policy limiting women’s sports to athletes whose biological sex is female
Recommendation
At site of suspected mass killings, Syrians recall horrors, hope for answers
'One Shining Moment' caps off 2024 men's NCAA Tournament following UConn's win over Purdue
Spring is hummingbird migration season: Interactive map shows where they will be
Masters winners: Who has won the most Green Jackets at Augusta National?
Meet first time Grammy nominee Charley Crockett
2-time All-Star Ja Morant defended himself during pickup game fight, judge says
Naya Rivera’s Ex Ryan Dorsey Mourns Death of Dog He Shared With Late Glee Star
Maryland lawmakers say coming bill will clarify that feds fully pay for replacing Baltimore bridge