CIOInsider India Magazine
World's Largest Cryptocurrency Exchange Binance Under Lawsuit by the US SEC
The US Securities and Exchange Commission (SEC) has filed a lawsuit against the largest cryptocurrency exchange in the world, Binance, and its CEO, Changpeng Zhao.
In a court document filed on June 5, the SEC said that the company ran a ‘web of deception’ that included boosting its trading volume fraudulently and combining customer funds.
In March, the US Commodity Futures Trading Commission (CFTC) also filed a lawsuit against Binance for regulatory infractions.
The SEC also claimed that Binance established distinct US corporations "as part of an elaborate scheme to evade US federal securities laws."
Sigma Chain, a trading company owned and controlled by Zhao, participated in ‘wash trading’ that fraudulently inflated the trading volume of crypto asset securities on the Binance from approximately three years ago until June 2022.The SEC further asserted that US platform.
Market players claimed that the SEC's accusations could hinder Binance and that the case would probably have an impact on the entire crypto sector.
Zhao, a Canadian citizen who was born in China and lived there up until the age of 12, established Binance there in 2017. Binance claims it does not have a headquarters and has chosen not to disclose the location of its primary Binance.com exchange, despite the fact that its holding company is domiciled in the Cayman Islands.
Binance asserted that consumers who transferred money to the account were not making deposits but rather were purchasing Binance's unique dollar-linked cryptocurrency token rather than admitting to mixing customer deposits with company monies.
Market players claimed that the SEC's accusations could hinder Binance and that the case would probably have an impact on the entire crypto sector. With up to 70 percent of the market, Binance dominates cryptocurrency trading, processing trades worth around $ 65 billion daily last year.
