The U.S. Securities and Exchange Commission (SEC) has sued Binance, the largest cryptocurrency exchange in the world, for breaking securities rules in the United States. The CEO of this cryptocurrency exchange, Changpeng Zhao (CZ), has also been sued by the regulatory agency. Cryptocurrencies plummeted after the news.
U.S. SEC Sues Binance and Changpeng Zhao
According to The Wall Street Journal, the U.S. SEC on Monday sued Binance due to allegedly running illegal trading activities in the United States. The report explains that Binance allowed U.S. customers to trade on their platform. This represents a violation of U.S. securities laws and triggered the response from the regulatory agency.
SEC Chairman Gary Gensler explained that Changpeng Zhao and Binance entities worked with multiple exchanges to create a ‘web of deception’ and evade U.S. law to operate in the country.
On that matter, Gensler said:
“As alleged, Zhao and Binance misled investors about their risk controls and corrupted trading volumes while actively concealing who was operating the platform, the manipulative trading of its affiliated market maker, and even where and with whom investor funds and crypto assets were custodied.”
Bitcoin (BTC), the largest cryptocurrency in the market has fallen to €25,800 (close to 5% in the last 24 hours). Other virtual currencies fell as well. For example, Binance Coin (BNB), lost 8.5% of its value during the last 24 hours, becoming the worst-performing cryptocurrency among the top 12 digital currencies.
The United States has been working in order to create a more compliant crypto ecosystem. They have also come after different crypto trading platforms that operate in the United States as well. Some other investigations and actions involve exchanges such as Coinbase or Kraken, among others.