The U.S. Securities and Exchange Commission is taking legal action against Binance and its CEO, Changpeng Zhao (CZ).
The SEC lawsuit claims that Binance “unlawfully solicited” customers from the U.S. to trade assets on unregistered platforms. Also, the securities regulator alleged that contrary to what the defendants claimed, Binance and CEO Zhao were directly involved in Binance.US operations.
Meanwhile, the latest development comes shortly after another federal regulator, the Commodity Futures Trading Commission (CFTC), also sued Binance for operating without proper registration, thereby violating the Commodity Exchange Act.
Meanwhile, Binance CEO Changpeng Zhao stated that the company will issue a statement once they see the SEC complaint.
4.
Our team is all standing by, ensuring systems are stable, including withdrawals, and deposits.
We will issue a response once we see the complaint. Haven’t seen it yet. Media gets the info before we do.
🙏
— CZ 🔶 Binance (@cz_binance) June 5, 2023
Amid the regulatory issues mounting against Binance, recent reports are stating that the crypto exchange could see a new CEO, Richard Teng, who was recently appointed to oversee Binance’s head of regional markets outside of the United States.
“We are disappointed that the SEC chose to file a complaint today seeking, among other remedies, purported emergency relief. From the start, we have actively cooperated with the SEC’s investigations and have worked hard to address their concerns. Most recently, we engaged in extensive good-faith discussions to reach a negotiated settlement. However, with its complaint today, the SEC abandoned that process and chose to act unilaterally and litigate. We are disheartened by that choice.”
Excerpt from Binance response to SEC lawsuit.
Binance strongly denies any allegations that user assets on the Binance.US platform have been at risk, emphasizing that all user assets on Binance and its affiliate platforms, including Binance.US, are safe and secure.
The release goes on to suggest that the SEC’s actions may be driven by an attempt to assert jurisdictional control over other regulators, with investor protection seemingly not being the SEC’s main priority. Binance believes that as a globally recognized entity, it has become an easy target caught in the middle of a regulatory conflict in the U.S.
This comes just over a month after Binance slammed the U.S. crypto crackdown stating it was “very difficult” to do business in the U.S.
After retweeting the company’s response to these allegations, C.Z. was quick to join in on the community’s reaction, responding to @WuBlockchain, stating, “Strong Together.”
