June 5 (Reuters) – The world’s largest cryptocurrency exchange Binance and its Chief Executive Officer Changpeng Zhao were sued on Monday by the United States Securities and Exchange Commission for failing to restrict access for US customers and misleading investors it was done. For operating an unregistered stock exchange.
The SEC complaint, filed in federal court in Washington DC, also alleges that Binance and Zhao secretly controlled client assets, allowing them to mix and divert their funds, and that Binance created separate US entities “as part of an elaborate scheme to evade the federal securities laws of the United States”.
Binance did not immediately respond to a request for comment on the allegations. Zhao tweeted that the company will issue a response if there is a complaint.
The move is the latest in a series of legal troubles for Binance, which was sued by the US Commodity Futures Trading Commission (CFTC) in March for its operations, which the regulator alleged was an “illegal” exchange and a “fake” exchange. compliance program. , Zhao called the complaint “disappointing” and an “incomplete statement of facts”.
Binance is also being investigated by the Justice Department for money laundering and sanctions violations, according to people familiar with the investigation.
Binance was founded in Shanghai in 2017 by CEO Changpeng Zhao, who is a Canadian citizen and was born in China until the age of 12. While the company is based in the Cayman Islands, Binance says it does not have its headquarters and declined to reveal the location of its parent exchange, Binance.com.
The platform dominates the cryptocurrency exchange landscape, processing trades of around $65 billion per day last year, accounting for 70% of the market.
The company has processed at least $10 billion in payments for criminals and companies trying to circumvent US sanctions, Reuters reported earlier.
