SEC Files Charges Against Binance and Co-Founder Changpeng Zhao for Alleged Regulatory Violations

The U.S. Securities and Exchange Commission (SEC) has filed 13 charges against Binance, the world’s largest crypto exchange, and its co-founder Changpeng Zhao. The SEC alleges that Binance and Zhao commingled billions of dollars worth of user funds and sent them to a European company controlled by Zhao.

The SEC claims that Binance and Zhao worked to subvert their own controls in order to allow high-net-worth U.S. investors and customers to continue trading on Binance’s unregulated international exchange. The SEC also alleges that Binance was operating as an unlicensed securities exchange in the U.S. without registering with the SEC, as required by law.

The lawsuit, filed Monday in federal court in Washington, D.C., claims that Binance’s actions were taken in order to “evade the critical regulatory oversight” aimed at protecting investors and markets. The SEC is seeking a permanent injunction against Binance and Zhao, as well as disgorgement of any ill-gotten gains and civil penalties.

Binance has responded to the charges, stating that they “strongly disagree” with the SEC’s allegations and that they “will vigorously defend the allegations and resolve this matter in the most expeditious and reasonable manner possible.”

The SEC’s charges against Binance and Zhao are a reminder of the importance of regulatory oversight in the crypto industry. The SEC’s mission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. The SEC’s actions against Binance and Zhao demonstrate its commitment to upholding these principles.