The Securities and Exchange Commission sued cryptocurrency trading platform Binance on Monday for operating an illegal exchange in the U.S.—the latest in a series of moves from U.S. regulators to crack down on crypto firms.
The Securities and Exchange Commission sued cryptocurrency trading platform Binance on Monday.
The lawsuit alleges Changpeng Zhao, the company’s founder, and Binance misused customer’s funds in some cases by diverting them to a trading entity controlled by Zhao called Sigma Chain.
Sigma Chain purportedly engaged in “manipulative trading” that artificially inflated Binance’s trading volume, the SEC said.
The SEC alleges Zhao and Binance publicly claimed the company was created as a separate, independent trading platform for U.S. investors but the company and its founder secretary controlled Binance.US platform’s operations behind the scenes.
In response to the lawsuit, Zhao tweeted the company hadn’t seen the complaint and would respond when it did.
The SEC filed the lawsuit in D.C. federal court.
This is a breaking story and will be updated.
U.S. Regulator Says That Binance Illegally Helped Americans Trade On Its Exchange (Forbes)