Article Summary
- The SEC has sued Binance, the world’s largest crypto exchange, and its CEO for alleged securities law violations.
- BNB price drops: Binance’s native token, BNB, plunges over 9% after the SEC accuses it of being unregistered security.
- Covert activities alleged: The SEC claims Binance mixed client assets and transferred them to another business owned by its CEO, putting customers at risk. Binance denies the claims and pledges to contest them.
Bitcoin and the Crypto market dropped to record lows on June 5 Wall Street opened, as the United States securities regulator sued the world’s largest crypto exchange
The Crypto market suddenly went into a deep red as US Securities Exchange Commission accused Binance, the operating company for Binance US, Binance founder and CEO Changpeng “CZ” Zhao on allegations of violating federal securities laws on Monday.
The allegation of SEC
The price of Binance’s native BNB token, plunged by more than 9% on the news. Notably, the SEC alleges that both BNB and BUST stablecoin are unregistered securities.
In addition, Bitcoin and Ethereum were down 5% for the day, as Bitcoin dropped below the $26K support levels. The global crypto market valuation also dipped to $1.09 trillion, posting a 4.84 crease over the last day
In the past 24 hours, 113,850 traders were liquidated, and the total liquidations come in at $299.60 million, the largest single liquidation order happened on Bitmex – XBTUSD valued at $9.94 million.
Binance’s offence
The Securities and Exchange Commission (SEC) has charged Binance with mixing “billions of dollars” in client assets and covertly transferring them to a different business owned by Changpeng Zhao, the founder of Binance.
Gurbil Gurbil, the director of SEC enforcement, said,
- “We argue that Zhao and the Binance entity not only knew the traffic rules but made a conscious decision to circumvent the rules and put their customers and investors at risk.” Grewal declared.
Among other things, the SEC has publicly claimed that Zhao and Binance have US customers banned from trading on Binance.com, but
- “in fact, Zhao and Binance are prohibited from trading on Binance.com by large US customers. They are subverting their controls to covertly prevent them from continuing.” Enable “On the Binance.com platform”.
The SEC also publicly claimed that Zhao and Binance had established Binance.US as an independent and independent trading platform for U.S. investors, but that “Zhao and Binance are secretly operating the Binance.US platform behind the scenes.
Funder CZ announced on Twitter that he hadn’t seen the lawsuit, writing the number 4 he frequently posts and saying, “Ignore FUD, fake news, attacks, etc.” posted in January. Alluded to tweets containing numbers.
- Haven’t seen it yet,” he wrote on Monday. “The media get information before we do.”
The lawsuit also argued that multiple allegations that Binance allows Americans (i.e., US citizens or residents) to trade on its platform are untrue.
In a blog post, Binance released a statement in which it claimed that it has
- “actively cooperated with the SEC’s investigations and has worked hard to answer their questions and address their concerns,” as well as work toward a resolution.
To be clear, there is absolutely no basis for the Staff’s decision given the considerable opportunity the Staff had to perform their inquiry, and any claims that user assets on the Binance.US platform have ever been in danger are simply untrue.
According to the statement,
- “All user assets on Binance and Binance affiliate platforms, including Binance.US, are safe and secure, and we will vehemently contest any claims to the contrary.
