• The US Securities and Exchange Commission (SEC) has filed a lawsuit against Binance, the world’s leading cryptocurrency exchange, and Changpeng Zhao, the CEO of the company.
• The SEC alleges that Binance secretly allow[ed] high-value U.S. customers” to trade on the platform in violation of U.S. securities laws which prohibits unregistered exchanges from servicing U.S. customers.
• SEC Chairman Gary Gensler stated that; “Through thirteen charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law.“

SEC Sues Binance and CZ for Breaking US Securities Rules

The United States Securities and Exchange Commission (SEC) has filed a lawsuit against Binance, the world’s leading cryptocurrency exchange, and Changpeng Zhao (CZ), the CEO of the company for breaking US securities rules.

Charges Filed by SEC Against Binance

The regulatory agency has alleged that Binance secretly allowed high-value US customers to trade on its platform in violation of US securities laws which prohibits unregistered exchanges from servicing US customers. The lawsuit also alleges that CZ exercised control over customer assets, adding that he commingled them with personal and company holdings.

Statement From SEC Chairman

SEC Chairman Gary Gensler stated that; “Through thirteen charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law.“

Recent Regulatory Actions Against Crypto Exchanges

This latest development comes two weeks after the SEC sued another major cryptocurrency exchange called Bittrex for violating securities laws. In recent months there have been several other crypto exchanges targeted by regulators including Kraken and Coinbase as well as other smaller firms such as BitMEX which were accused by CFTC for illegal activities related to derivatives trading without registration or proper licensing in place.

Effect on Bitcoin Price

The news has had a negative effect on bitcoin prices as it lost more than 2% so far today with potential further downside if it falls below $26k level soon following this news release from SEC regarding their lawsuit against Binance & CZ for breaking US securities rules