Zhao has long been one of the most influential names in crypto. In turn, Sigma Chain, a trading firm owned by Zhao, was allegedly able to artificially inflate trading volumes on Binance.US through a wash-trading scheme, according to the SEC. The SEC also said Binance.US failed to properly surveil trading on its market as it had claimed to be doing so. “We are operating as a fking unlicensed securities exchange in the USA bro,” a former Binance executive told another in December 2018, according to the SEC’s complaint.Īmong the other allegations leveled against Binance were that the exchange has been operating an unregistered national securities exchange, broker-dealer and clearing agency. federal securities laws” and continue directing certain “high-value U.S. The SEC said Monday that the affiliate that was set up in 2019 - Binance.US - was “part of an elaborate scheme to evade U.S. regulators, however, have alleged that Binance was in the states all along.
But the exchange was quick to grab market share overseas, and, in 2019, declared that it was setting its sights on the U.S. “We intend to defend our platform vigorously.”įounded in 2017, Binance broke onto the scene relatively late compared to other crypto businesses like Coinbase and Kraken. “While we take the SEC’s allegations seriously, they should not be the subject of an SEC enforcement action, let alone on an emergency basis,” the company wrote in the post. The company said it was “disheartened” by the SEC’s decision to bring the case to court after the two sides had been engaged in talks about a settlement. At one point in the complaint, the SEC alleges that customer money was “at Binance’s and Zhao’s mercy.”īinance denied the SEC’s allegations in a blog post, including the claim that customer assets at Binance.US were at risk. But the Binance case represents Gensler’s biggest salvo to date, with the agency taking a broad swing against the exchange and its high-profile CEO. The exchange had told CryptoSlate that the exits were necessary as it gave the platform more than seven years of financial runway to continue operating as a crypto-only exchange.Since the fall of FTX seven months ago, the SEC has orchestrated a sweeping crackdown on the $1 trillion crypto market. Several top executives of Binance.US and about one-third of its staff, including CEO Brian Shroder, head of legal Krishna Juvvadi, and chief risk officer Sidney Majalya, left the company over the past week. Meanwhile, Binance.US had sought court protection from the regulator’s request for information which it had described as “troubling and inappropriate.” According to the firm, the SEC’s requests are a “fishing expedition” that is “overbroad and unreasonable.” Binance.US top executives leave. Additionally, the SEC requests a 14-day extension for the discovery period, pending approval of its latest court filing. “Defendants still cannot credibly explain the continued role of the Binance Entities in the custody and control of BAM’s crypto assets and Customer Crypto Assets or provide credible evidence that BAM personnel maintain sole possession, custody, and control of BAM company and Customer Assets in the United States.”Ĭonsequently, the SEC is seeking a court order to compel the embattled exchange to produce the requested documents and to reject its opposition to the original consent order. According to the financial watchdog, the crypto exchange had initially refused to provide the required information about its connection with Ceffu before making a turnaround and asking the regulator to ask Ceffu for details on how it created BAM’s wallets. The SEC further claimed that the firm refused to produce essential witnesses for deposition, adding that it “responded to requests for relevant communications with blanket objections and has refused to produce documents kept in the ordinary course of its business.”Īdditionally, the SEC claimed that Binance.US redirected its inquiry into the custody of customer assets to an offshore custodian named Ceffu.
In the filing, the financial regulator stated that the exchange’s holding company, BAM Holdings, had produced 220 documents of mainly unintelligible screenshots without dates or signatures. SEC says Binance.US failed to provide the requested information Securities and Exchange Commission (SEC) has accused Binance.US of failing to cooperate, according to a Sept.
0 kommentar(er)
