The US Securities and Exchange Commission (SEC) has filed a complaint against cryptocurrency exchange Binance, accusing the company of violating federal securities laws.
The Securities and Exchange Commission claims that Binance, the world’s largest cryptocurrency exchange, has illegally solicited US investors to trade crypto-asset securities on its platforms, Binance.com and Binance.US. According to the complaint, Binance engaged in unrecorded offerings and sales of securities and made false representations to investors regarding monitoring and controls over manipulated trading.
According to the SEC’s claim, Binance and its subsidiary BAM Trading operate as an exchange, broker-dealer, and clearing agency without registering with the SEC. The commission also alleges that Binance conducted unregistered offers and sales of its crypto assets, as well as profit-generating programs and investment schemes. Specifically, the fees focus on the BNB and BUSD cryptocurrencies launched by Binance, as well as the BNB Vault and Simple Earn programs, “and the so-called ‘staking’ investment plan available on the Binance.US platform.” The defendants are accused of denying investors material information about these securities and programs.
Further, the complaint states that Binance and BAM Trading made misrepresentations about the controls applied to the Binance.US platform, which led to the collection of large amounts of funds from private investors. The SEC asserts that Binance evaded US laws and regulations by implementing a scheme to surreptitiously escape registration requirements. “As Zhao himself admitted, Binance did not want to be ‘responsible’ for these actions,” the charges filed state. “As the Binance CCO pointed out, (o) on the surface we can’t see that we have US users (,) but in reality, we have to get them through other creative means.”
in Answer In the SEC complaint, Binance expressed its disappointment and confirmed its active cooperation with the SEC investigation. Binance stated that it engaged in extensive discussions to reach a settlement but that the SEC chose to act unilaterally. The company said it intends to vigorously defend its platform and criticized the SEC’s enforcement approach, calling for more clarity and direction for the digital asset industry. Binance also refuted allegations that user assets on the Binance.US platform were at risk, and reassured customers of the safety and security of their funds.
The SEC is seeking several remedies and decisions, including a permanent injunction, annulment of ill-gotten gains, civil financial penalties, and fair compensation.