The SEC went to court in the District of Columbia, publicly declaring Monday, June 5, that the Binance administration and personally its chief executive, Changpeng Zhao, had failed to restrict access to its trading floor from U.S. customers and had “misrepresented critical information and misled investors about their means of controlling the market.
“Based on thirteen counts, we allege that Changpeng Zhao and Binance participated in an extensive network of investor deception, conflict of interest, failure to disclose information, and willful evasion of the law,” SEC Chairman Gary Gensler announced.
The SEC’s 136-page lawsuit accuses Binance of multiple violations of federal securities law and trading in unregistered securities;
Unregistered securities include blockchain tokens from Solana (SOL), Cardano (ADA), Polygon (MATIC), Coti (COTI) and Algorand (ALGO), Filecoin networks (FIL), Cosmos hub (ATOM), Sandbox platform (AXS), Axie infinity and Decentraland (MANA).
The commission insists it has found that it actually managed the operations of the US-based Binance.US site, despite assurances from
Changpeng Zhao about the site’s complete independence from its parent cryptocurrency exchange. The suit asks the district court to order the freezing of Binance’s assets, as well as the seizure of all possible documents and accounting papers to prevent the destruction of evidence.
Binance and its CEO Changpeng Zhao had previously been accused by the Commodity Futures Trading Commission (CFTC) of possibly evading federal laws and operating an unregistered digital asset derivatives exchange.