📰 SEC Sues Crypto Exchange Binance and CEO Changpeng Zhao Over Multiple Securities Violation Allegations

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against crypto exchange Binance, its US operating company Binance.US, and founder/CEO Changpeng Zhao (CZ), alleging violations of federal securities laws. The suit accuses Binance and CZ of offering unregistered securities to the public via the BNB token and Binance-linked BUSD stablecoin. Moreover, Binance's staking service is said to violate securities law.

Binance, Binance.US, and BAM Trading, the operating company for Binance.US, face accusations of failure to register as a clearing agency, broker, and exchange. The SEC also alleges that Binance allowed for the commingling of customer funds and that CZ secretly controlled Binance.US, and manipulated trading volume through a CZ-owned entity.

Further allegations revolve around Binance allowing U.S. persons to trade on its platform despite claiming not to serve this demographic. The suit also alleges that several other tokens, including Solana (SOL), Cardano (ADA), Polygon (MATIC), Coti (COTI), Algorand (ALGO), Filecoin (FIL), Cosmos (ATOM), Sandbox (AXS), Axie Infinity, and Decentraland (MANA) are securities.

This lawsuit adds to the allegations brought by the U.S. Commodity Futures Trading Commission (CFTC) in March, claiming that Binance and CZ knowingly offered unregistered crypto derivatives products in the U.S. against federal law. Source: CoinDesk