Binance accused of web fraud.
Crypto giant Binance has been accused of engaging in a “network of fraud” as it faces another lawsuit from US financial regulators. The Securities and Exchange Commission (SEC) said the trading platform and its founder Changpeng Zhao flouted rules meant to protect investors from continuing to operate in the United States.
The company and Mr. Zhao is accused of misappropriating customers’ money. Binance said it would “vigorously” defend the platform.
The SEC complaint is the second case filed against the company this year and follows US promises to police the crypto industry more aggressively. The company, which was founded in 2017 and operates in more than 100 countries, denied that customers’ money was at risk.
“While we take the SEC’s allegations seriously, there should be no action by the SEC,” Binance said, adding that it has been in discussions with the regulator.
digital assets
He said the case is an example of “the wrongful and conscious refusal of regulators to provide the clarity and guidance needed for the digital assets industry.”
Binance, which is registered in the Cayman Islands, is known to be the world’s largest platform for buying and selling cryptocurrencies and other digital assets. The SEC complaint outlines 13 charges, accusing the company and Mr. Zhao for soliciting investors and customers illegally, misrepresenting the level of trading on the platform, and misleading the public about its management.
The crypto company and its founder are also accused of diverting customer funds to companies controlled by Mr. Zhao, a Chinese-Canadian billionaire known in the industry as CZ. Mr. Zhao and Binance “engaged in a vast web of fraud, conflicts of interest, lack of disclosure and evasion,” SEC Chairman Gary Gensler said.
