By Nikhilesh De. June 5, 2023. (CoinDesk).
The U.S. Securities and Exchange Commission sued crypto exchange Binance, the operating company for Binance.US and Binance founder and CEO Changpeng “CZ” Zhao on allegations of violating federal securities laws on Monday.
Binance, Binance.US and CZ offered unregistered securities to the general public in the form of the BNB token and Binance-linked BUSD stablecoin, said the suit, which also alleges that Binance’s staking service violated securities law. There are similar charges against BAM Trading – the operating company for Binance.US – and Binance itself, including failure to register as a clearing agency, failure to register as a broker and failure to register as an exchange. The SEC also alleged that Binance allowed for commingling of customer funds, that CZ was “secretly” controlling Binance.US and that a CZ-owned and operated entity was inflating Binance.US’sding volume.
The suit also alleged multiple times that Binance allowed U.S. persons (meaning U.S. citizens or people living in the U.S.) to trade on its platform, despite saying it wasn’t.