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On Monday, the US Securities and Exchange Commission (SEC) pressed several charges against Binance, marking one of the agency’s most significant enforcement actions against the crypto industry in history.
Let’s take a look at the regulator’s most shocking allegations against the exchange, along with Binance’s response to its claims.
What did Binance do?
136 page filing accused Binance and Binance US of participating in the “unregistered offer and sale” of crypto asset securities, fulfilling the functions of an “exchange, broker-dealer and clearing agency” without prior registration.
Among its illicit securities offerings were its yield-generating schemes “BNB Vault” and “Simple Earn,” as well as the platform’s native token BNB and its stablecoin BSD. BNB is currently the fourth largest cryptocurrency by market cap, and Binance holds a significant portion of its total supply.
The SEC said that without the specific oversight of registered exchanges and broker-dealers, Binance moved and mixed customers’ assets in ways that regulated companies would not.
For example, the agency said that Binance and Binance US siphoned billions of dollars in users’ assets from both platforms within an entity called “Merit Peaked Ltd.”, controlled by both Binance and its CEO, Changpeng Zhao (CZ). is done.
Those assets were then transferred to third parties – as former FTX boss Sam Bankman-Fried did at his now-collapsed exchange.
In general, the lawsuit claims that Binance and CZ exercised control over assets on Binance US and its platform, despite pretending to be independent from the US entity.
It also accused Binance of secretly continuing to serve its most valuable US customers on the international exchange, according to an allegation made by the Commodities and Futures Trading Commission in March.
Finally, the SEC called a Zhao-controlled entity called “Sigma Chain” engaged in wash trading on Binance US in order to measure trading volume and valuation of certain assets on the platform. This was possible because the institution did not implement the “surveillance or manipulative trading controls” that the firm’s management had promised investors.
Binance Punishment and Response
As punishment for its violations, the SEC wants Binance to be completely barred from securities and crypto trading businesses and to pay penalties for any undue profits that its actions as well as ex- The decision arises out of interest.
in a public response LetterBinance accused the SEC of not prioritizing investors, but instead trying to gain “jurisdiction” in overseeing crypto against other regulators.
“All user assets on Binance and Binance affiliated platforms, including Binance.US, are safe and secure, and we will vigorously defend any allegations to the contrary,” the company wrote.
binance denied Reuters reported claims last month that it had user funds mixed with corporate funds, adding that any “mixing” occurred simply by converting users’ dollar deposits into cash.
Binance Free $100 (Exclusive): Use this link to register and get $100 free and 10% off on Binance Futures for the first month. (terms).
PrimeXBT SPECIAL OFFER: Use this link to register and enter the code CRYPTOPOTATO50 to receive up to $7,000 on your deposit.
[ad_1]
On Monday, the US Securities and Exchange Commission (SEC) pressed several charges against Binance, marking one of the agency’s most significant enforcement actions against the crypto industry in history.
Let’s take a look at the regulator’s most shocking allegations against the exchange, along with Binance’s response to its claims.
What did Binance do?
136 page filing accused Binance and Binance US of participating in the “unregistered offer and sale” of crypto asset securities, fulfilling the functions of an “exchange, broker-dealer and clearing agency” without prior registration.
Among its illicit securities offerings were its yield-generating schemes “BNB Vault” and “Simple Earn,” as well as the platform’s native token BNB and its stablecoin BSD. BNB is currently the fourth largest cryptocurrency by market cap, and Binance holds a significant portion of its total supply.
The SEC said that without the specific oversight of registered exchanges and broker-dealers, Binance moved and mixed customers’ assets in ways that regulated companies would not.
For example, the agency said that Binance and Binance US siphoned billions of dollars in users’ assets from both platforms within an entity called “Merit Peaked Ltd.”, controlled by both Binance and its CEO, Changpeng Zhao (CZ). is done.
Those assets were then transferred to third parties – as former FTX boss Sam Bankman-Fried did at his now-collapsed exchange.
In general, the lawsuit claims that Binance and CZ exercised control over assets on Binance US and its platform, despite pretending to be independent from the US entity.
It also accused Binance of secretly continuing to serve its most valuable US customers on the international exchange, according to an allegation made by the Commodities and Futures Trading Commission in March.
Finally, the SEC called a Zhao-controlled entity called “Sigma Chain” engaged in wash trading on Binance US in order to measure trading volume and valuation of certain assets on the platform. This was possible because the institution did not implement the “surveillance or manipulative trading controls” that the firm’s management had promised investors.
Binance Punishment and Response
As punishment for its violations, the SEC wants Binance to be completely barred from securities and crypto trading businesses and to pay penalties for any undue profits that its actions as well as ex- The decision arises out of interest.
in a public response LetterBinance accused the SEC of not prioritizing investors, but instead trying to gain “jurisdiction” in overseeing crypto against other regulators.
“All user assets on Binance and Binance affiliated platforms, including Binance.US, are safe and secure, and we will vigorously defend any allegations to the contrary,” the company wrote.
binance denied Reuters reported claims last month that it had user funds mixed with corporate funds, adding that any “mixing” occurred simply by converting users’ dollar deposits into cash.
Binance Free $100 (Exclusive): Use this link to register and get $100 free and 10% off on Binance Futures for the first month. (terms).
PrimeXBT SPECIAL OFFER: Use this link to register and enter the code CRYPTOPOTATO50 to receive up to $7,000 on your deposit.
