Binance.com, the world’s largest crypto trading platform, and its founder Changpeng Zhao have been accused of a variety of securities law violations by the US regulator. The US Securities and Exchange Commission (SEC) said in a statement on Monday that Zhao and the Binance entities engaged in a widespread web of fraud, conflict of interest, lack of disclosure and calculated evasion of the law.
Among other things, the US regulator alleged that, while Zhao and Binance publicly claimed that US customers were prohibited from transacting on Binance.com, they were in fact allowing high-value US customers to trade on their platform. Broke down his own controls to allow him to continue.
“Through thirteen counts, we allege that Zhao and the Binance entities engaged in a widespread web of fraud, conflict of interest, lack of disclosure and evasion of law,” said SEC Chairman Gary Gensler.
“As alleged, Zhao and Binance misled investors about their risk controls and tainted trading volumes, while actively concealing who was operating the platform, including its affiliated market maker— sabotaged trades, and even where and with whom investor funds and crypto assets were held.”
Gensler said he attempted to evade US securities laws by announcing sham controls, which he defied behind the scenes so that he could keep high-value US clients on his platform.
(With inputs from ANI)
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