Crypto News

SEC Files Lawsuit Against Binance and CEO Changpeng Zhao for Securities Law Violations


The US Securities and Exchange Commission (SEC) has taken legal action against Binance, the largest cryptocurrency exchange by trading volume, and its CEO Changpeng Zhao, alleging violations of US securities laws. This lawsuit follows a previous action by the Commodity Futures Trading Commission against the company.

According to Bloomberg, the SEC accuses Binance of mishandling customer funds and providing false information to regulators and investors about its operations. The regulator claims that Binance misused billions of dollars in customer funds by sending them to a separate company owned by Zhao. Furthermore, the SEC alleges that Binance made false statements to investors regarding the presence of adequate systems to detect manipulative trading and failed to prevent US investors from accessing the platform.

The lawsuit has sent shockwaves through the industry, coming at a time when Binance has been facing increasing scrutiny from regulatory agencies. Notably, the US Justice Department is currently investigating the exchange for alleged money laundering practices.

In response to the SEC’s lawsuit, Binance has released a statement expressing disappointment in the commission’s actions. The exchange states that it has cooperated with the SEC but the commission chose to act unilaterally. Binance asserts its readiness to vigorously defend itself, highlighting the SEC’s refusal to provide clarity and guidance to the digital asset industry. The exchange believes that the SEC’s true intention is to make headlines and affirms its determination to fight the lawsuit within the bounds of the law.

The lawsuit filed by the SEC alleges that Binance commingled billions of dollars in customer funds and concealed this fact while sending the funds to a third-party company owned by Zhao, called Merit Peak Limited. Additionally, the SEC claims that Binance allowed the diversion of customer assets to Sigma Chain, an entity also owned and controlled by Zhao, which engaged in manipulative trading to artificially inflate trading volume figures. These charges add to the growing list of accusations against Binance, which is already under investigation by the Justice Department for potential money laundering concerns following the collapse of FTX in 2022.

Despite the legal challenges and regulatory pressure, Binance remains determined to defend its position and hopes for more clarity and guidance from regulators in the digital asset industry. The outcome of this lawsuit will have significant implications for both Binance and the broader cryptocurrency market.

Creative Mind

Hello Dope SOUL'S, I'm the founder of, a self-taught blogger with a passion for technology. My journey began with a fascination for tech's power to shape our world, leading me to self-learn computer science and engineering. After years as a self-taught software engineer, I realized my true calling lay in sharing knowledge. This inspired, where I provide valuable insights on tech trends, gadgets, and software. As a self-taught blogger, I explore new tech, analyze trends, and offer honest reviews. I believe in demystifying complex subjects for both tech enthusiasts and beginners. Beyond blogging, I actively engage in tech conferences, collaborating with industry pros to ensure my content stays accurate and relevant. is a platform dedicated to sharing knowledge, connecting with the tech community, and helping readers navigate the ever-evolving tech landscape. Thanks for joining this journey. Stay curious and tech-savvy! Best regards, [Creative Mind] Founder,

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