Binance Is in Deep Trouble
It’s no secret that the US Securities and Exchange Commission has been investigating Binance, the world’s largest crypto exchange—which has no head office or formal address but processes $12 billion worth of cryptocurrency transactions per day. Among other allegations, the SEC claims that Binance and the company’s CEO and founder, Changpeng Zhao, had the freedom to “divert customer assets as they please” to another Zhao-owned business, Sigma Chain—an entity the SEC accuses of engaging in “manipulative trading that artificially inflated the trading volume.” The SEC also alleges that Binance and Zhao concealed the commingling of billions of dollars of customer assets, which were delivered to yet another third party, Merit Peak Limited, also owned by Zhao. “We allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law,” SEC chair Gary Gensler said in a statement accompanying the charges. In an email statement, Binance spokesperson Simon Matthews said the firm is “disappointed” with the SEC charges and attacked the regulator for failing to provide sufficient rules for crypto companies operating in the US—by now, a common refrain. He also said that all user assets across all Binance platforms are “safe and secure.” In a tweet published shortly after the SEC complaint, Zhao wrote “4”—a symbol he uses to dismiss allegations made against his company as baseless FUD.
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