SAN FRANCISCO: The US Securities and Exchange Commission (SEC) has sued leading crypto exchange Binance, its CEO Changpeng Zhao and BAM Trading and BAM Management over allegedly mishandling funds and lying to regulators.
In a federal lawsuit, the regulator filed 13 charges against the defendants.
“Defendants unlawfully solicited US investors to buy, sell, and trade crypto asset securities through unregistered trading platforms available online at binance.com and Binance.US,” the lawsuit read.
“Defendants have engaged in multiple unregistered offers and sales of crypto asset securities and other investment schemes,’ it added.
The lawsuit said behind the scenes, “Zhao and Binance were intimately involved in directing BAM Trading’s US business operations and providing and maintaining the crypto asset services of the Binance.US Platform”.
In a blog post, Binance said late on Monday that they are disappointed that the SEC “chose to file a complaint against Binance seeking, among other remedies, purported emergency relief”.
“From the start, we have actively cooperated with the SEC’s investigations and have worked hard to answer their questions and address their concerns. But despite our efforts, with its complaint, the SEC abandoned that process and instead chose to act unilaterally and litigate.We are disheartened by that choice,” said the crypto exchange.
“While we take the SEC’s allegations seriously, they should not be the subject of an SEC enforcement action, let alone on an emergency basis”.
This is the second blow to Binance this year.