Current:Home > FinanceSEC sues crypto giant Binance, alleging it operated an illegal exchange -Wealth Momentum Network
SEC sues crypto giant Binance, alleging it operated an illegal exchange
View
Date:2025-04-15 15:20:38
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! (99949)
Related
- What do we know about the mysterious drones reported flying over New Jersey?
- Sam Reich on revamping the game show - and Dropout's success as a small streamer
- Florida zoo welcomes furry baby Hoffman’s two-toed sloth
- What is Taylor Swift's security like at games? Chiefs CEO on her 'talented' bodyguards
- NHL in ASL returns, delivering American Sign Language analysis for Deaf community at Winter Classic
- 'Wonder Man' crew member dies after accident on set of Marvel Studios series
- 'Mr. & Mrs. Smith' 2024 cast: See the full cast headlined by Donald Glover, Maya Erskine
- 'Mr. & Mrs. Smith' is a stylish take on spy marriage
- Realtor group picks top 10 housing hot spots for 2025: Did your city make the list?
- Slain CEO’s parents implore Maryland lawmakers to end good behavior credits for rapists
Ranking
- Hackers hit Rhode Island benefits system in major cyberattack. Personal data could be released soon
- Cryptocurrency Companies Must Now Report Their Energy Use to the Government
- State Senate committee rejects northern Virginia casino bill
- Can an employer fire or layoff employees without giving a reason? Ask HR
- Intellectuals vs. The Internet
- Bachelor’s Joey Graziadei Mixes Up Gypsy Rose Blanchard and Ruth Bader Ginsburg
- Georgia Republicans push requiring cash bail for 30 new crimes, despite concerns about poverty
- Brandon Aiyuk is finally catching attention as vital piece of 49ers' Super Bowl run
Recommendation
Average rate on 30
By disclosing his cancer, Charles breaks centuries of royal tradition. But he shares only so much
Anna “Chickadee” Cardwell Shares Hope of Getting Married Prior to Her Death
Deadly decade-long listeria outbreak linked to cojita and queso fresco from a California business
Stamford Road collision sends motorcyclist flying; driver arrested
Honda recalls 750,000 vehicles over air bag flaw
Edmonton Oilers' win streak ends at 16 games after loss to Vegas Golden Knights
State of Play 2024: Return of Sonic Generations revealed, plus Silent Hill and Death Stranding