The Securities and Exchange Commission filed 13 charges against Binance, the world’s largest crypto exchange, and its founder, Changpeng Zhao, alleging both comingled billions of dollars worth of user funds and sent them to a European company controlled by Zhao, CNBC reports.
The U.S. regulator alleged on Monday that Zhao and his exchange worked to subvert “their own controls” to allow high net worth U.S. investors and customers to continue trading on Binance’s unregulated international exchange.
One senior executive allegedly told a compliance officer that the company was operating as a ”[f---ing] unlicensed securities exchange in the USA bro.”
The complaint alleges Binance created Binance.US as a shield for the main company and Zhao, to “reveal, retard, and resolve” law enforcement targets and insulate Binance.
Binance issued a statement on its blog stating:
We are disappointed that the U.S. Securities and Exchange Commission chose to file a complaint today against Binance seeking, among other remedies, purported emergency relief. From the start, we have actively cooperated with the SEC’s investigations and have worked hard to answer their questions and address their concerns. Most recently, we have engaged in extensive good-faith discussions to reach a negotiated settlement to resolve their investigations. But despite our efforts, with its complaint today the SEC abandoned that process and instead chose to act unilaterally and litigate. We are disheartened by that choice.