In Real Life: Crypto Crash
What was behind the collapse of crypto giant FTX? And what does it say about other digital currencies, and the collision of tech and finance?
LEARN MOREPosted: 7:46 p.m. EDT Jun 5, 2023
The Securities and Exchange Commission has sued cryptocurrency company Binance and its CEO Changpeng Zhao for misuse of investor funds and for breaking a range of securities laws.
The SEC says Binance commingled customer funds, didn't register itself as an exchange, and defrauded its customers. The commission says Binance and its CEO Zhao knowingly and deliberately sought to avoid regulation and oversight in the U.S. The suit lists 13 charges total.
Binance, the world's biggest crypto exchange, is a limited liability company run out of the Cayman Islands.
In a response to the SEC's suit, Binance accuses the commission of taking a blunt approach where one isn't warranted.
"While we take the SEC’s allegations seriously, they should not be the subject of an SEC enforcement action, let alone on an emergency basis," the company wrote.
In March, the Commodity Futures Trading Commission sued Binance in district court for separate violations, including not preserving communications and not verifying the identities of its customers.
The latest case is similar to a recent suit against the now defunct cryptocurrency exchange FTX, in which founder Sam Bankman-Fried was charged with money laundering and fraud. Bankman-Fried is expected to stand for a criminal trial later this year.
