The Securities and Exchange Commission (SEC) complaint, filed in federal court in Washington, listed 13 allegations against Binance, Zhao and the operator of its purportedly independent US exchange.
The SEC alleged that Binance artificially inflated its trading volumes and diverted customer funds, failed to restrict US customers from its platform and misled investors about market surveillance controls.
The SEC also alleged that Binance and Zhao, its billionaire founder and one of the cryptocurrency industry’s top tycoons, secretly controlled client assets, allowing them to commingle and divert investors’ funds “as they wish.”
“We allege that Zhao and Binance engaged in an extensive web of deception, conflicts of interest, disclosure and willful disregard of the law,” SEC Chairman Gary Gensler said in a statement.
The value of the world’s largest cryptocurrency “Bitcoin” fell as much as 6% after the news, reaching its lowest level in almost three months. Binance’s cryptocurrency BNB, the world’s fourth-largest by market cap, fell more than 5%.
Market participants say the SEC’s allegations could disrupt Binance, and the lawsuit is likely to reverberate through the cryptocurrency industry. Binance dominates cryptocurrency trading, processing around $65 billion worth of transactions per day last year.
2023-06-05 18:44:58
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