SEC Files Lawsuit Against Binance Exchange and CEO ‘CZ’
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Binance Exchange and its CEO, Changpeng Zhao (CZ), alleging that they have broken US securities laws. Bloomberg claims that both the foreign and US divisions of the trading platform were named in the lawsuit.
The crypto giant was hit with 13 counts by the SEC, including improper US operations and misrepresenting itself to consumers. The markets regulator also identified many other cryptocurrencies trading on Binance, including Cardano (ADA), Polygon (MATIC), and Solana (SOL), as securities.
Binance Coin (BNB) Drops 5.47%
The price of Binance Coin (BNB) has taken the biggest hit from the lawsuit, despite the fact that it has been expected for some time. Binance Coin (BNB), a digital currency known for its central role in the Binance Exchange’s operations, has seen its value drop by 5.47% in the previous 24 hours, to $289 per coin.
The Binance CEO has not provided many specifics, although He did tweet to His 8.4 million followers that there are teams in place to make sure payments and withdrawals are processed routinely.
The CEO of Binance, who is said to be leaving the company, said he has not seen the concerns yet and that a reaction would be provided after he and his team get the complaint from the market regulator. Many industry insiders who have been monitoring ecosystem movements since the beginning of the year are not surprised by the US SEC’s crackdown on Binance Exchange.
This year, the US SEC has filed lawsuits against many cryptocurrency organisations, including Kraken Exchange. A $30 million settlement with the SEC resolved allegations that the trading platform had offered its staking product without proper registration.
In addition to these direct crackdowns, the SEC has also issued Wells Notices to companies like Coinbase Global Inc, which might be followed by litigation. Binance is now under scrutiny, but whether the exchange would pursue settlement or go to court remains to be seen.