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The SEC accuses Binance and Zhao of violating 13 US financial markets laws in a civil lawsuit filed in federal court in Washington on Monday.
Platforms not properly registered
Binance.com and Binance.us platforms are not properly registered. In addition, Binance and Zhao stated that US customers are not allowed to use Binance.com; However, the SEC said that “behind the scenes”, Zhao instructed Binance to secretly allow key US customers to trade cryptocurrencies on the platform. Binance.us, on the other hand, is not independent as publicly stated, but is “secretly controlled” by Zhao and Binance.
«Trade volume artificially inflated»
Zhao and Binance are also accused of misleading investors about their risk controls and trading volumes. In addition, client investments were moved, including the Zhao-controlled company Sigma Chain, which artificially inflated the trading volume of the platform through “manipulative trading”. SEC boss Gary Gensler spoke of “an extensive web of deception, conflicts of interest, lack of disclosure, and calculated circumvention of the law.”
The announcement of the lawsuit caused a drop in the value of cryptocurrencies. Bitcoin is down almost two percent and Binance Coin is down more than five percent.
Zhao explained that the Binance team has ensured that “systems are stable”, including any possible withdrawals. The company will comment on the case as soon as it becomes available.
The world’s largest crypto platform
In March, the financial market regulator CFTC sued Binance. The CFTC also accuses the digital currency market of violating US financial market rules.
Binance is the world’s largest cryptocurrency trading platform. The industry has experienced many shocks in recent months. Cryptocurrency platform FTX, founded by Sam Bankman-Fried, went bankrupt in November. Bankman-Fried was later arrested in the Bahamas and extradited to the United States, where, among other things, he was charged with fraud.
(AFP)
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
