In response to the recent lawsuit from the Securities and Exchange Commission (SEC) accusing Binance of conducting unregistered securities transactions, the United States District Court in Washington, D.C. wasted no time in issuing a subpoena to Binance CEO Changpeng Zhao on June 7.
The summons, delivered just two days after the SEC’s legal action, notified Zhao of the lawsuit against him and the SEC.
Call served quickly
While Binance CEO Changpeng Zhao may not be required to appear in person, he is required by law to process the summons once it is formally submitted. According to the document, once the service is complete, Binance and Zhao will have 21 days to provide a response.
Summons, which was first issued in Twitter Eleanor Territtwarns that failure to respond within the time frame specified may result in a default judgment being entered against them, and the granting of the relief requested in the complaint.
As mentioned in the summons, Binance CEO Changpeng Zhao, also known as CZ, is currently residing in Malta, the Mediterranean island nation.
CZ was quick to take to Twitter after this news to remind his followers that this action is “not new” and there is “no FUD needed.”
These actions come just days after the US Securities and Exchange Commission (SEC) filed a lawsuit against Binance on June 5.
The commission accused Binance of engaging in an offering of unregistered securities. In the close wake of Binance’s lawsuit, the SEC also targeted Coinbase, one of the leading cryptocurrency exchanges, on similar grounds.
The committee claimed that some of the popular cryptocurrencies offered by Coinbase, including Solana (SOL), Polygon (MATIC), and Sandbox (SAND), meet the criteria for being classified as a security. The recall is the latest development in this case.
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Community unification
A recent court order requiring Binance CEO Changpeng Zhao to appear in court indicates heightened regulatory scrutiny surrounding the rapidly expanding cryptocurrency industry.
With this development, market participants and observers are closely watching Zhao’s response and its potential ramifications for the broader crypto market.
Although the SEC’s actions against both Binance and Coinbase have so far proven to unite the community even more closely, with other high-profile community members such as Kristin Smith, CEO of the Blockchain Association, stating that in While SEC action is expected, it remains unacceptable, along with many others who share her view.