SEC Sues Binance And Changpeng Zhao Over Allegations Of Violating The Securities Code

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SEC Sues Binance And Changpeng Zhao Over Allegations Of Violating The Securities Code. The US Securities and Exchange Commission (SEC) sued crypto exchange Binance, the operating company for Binance US and Binance founder and CEO Changpeng Zhao (CZ) on charges of violating federal securities laws on Monday.

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In the SEC lawsuit, Binance, Binance US and CZ offered unregistered securities to the general public in the form of the BNB token and the BUSD stablecoin associated with Binance.

The lawsuit also accuses the Binance service of violating securities laws. There are similar lawsuits against BAM Trading the company that operates Binance.US and Binance itself, including failure to register as a clearing agent, failure to register as a broker and failure to register as an exchange.

The SEC also accused Binance of permitting the mix-up of customer funds. CZ is also suspected of “covertly” controlling Binance US and other entities owned by Binance to inflate Binance US trading volume.

“As the second part of Zhao and Binance’s plan to protect against US regulation, they have consistently publicly claimed the Binance.com platform does not cater to US people, while hiding their efforts to ensure their most valued US customers continue trading on the platform,” said the lawsuit, quoted from CoinDesk, Tuesday (6/6/2023).

SEC Sues Binance And Changpeng Zhao Over Allegations Of Violating The Securities Code. When the Binance.US Platform launched in 2019, Binance announced it was implementing controls to block US customers from the Binance.com Platform.

In fact, Binance does the opposite. Zhao directed Binance to assist certain high-value US customers in circumventing these controls and did so discreetly because as Zhao himself admitted Binance did not want to be ‘responsible’ for these actions.

The SEC also charged a number of other tokens, including native coins for Solana (SOL), Cardano (ADA), Polygon (MATIC), Coti (COTI) and Algorand (ALGO) blockchains, Filecoin network (FIL), Cosmos hub (ATOM), platform Sandbox (SAND), Axie infinity (AXS) and Decentraland (MANA) are securities.

Read Also: Reasons Hong Kong Will Lift Crypto Trading Ban

Global cryptocurrency exchange Binance has announced the launch of a local crypto trading platform for residents of Japan starting this summer.

Binance said it has created a new platform for residents in Japan to fully comply with Japanese regulations.

“The new platform will be available this summer. We will announce the launch date and provide further details in the coming months,” said Binance, quoted from Bitcoin.com, Sunday (4/6/2023).

Services offered by global platform Binance will be discontinued for residents of Japan on November 30th. Global platform users will be able to migrate to the new on-premises platform through a new identity verification (KYC) process, which will be available after August 1, 2023.

Starting December 1st, all global Binance accounts held by local Japanese users will be set to withdraw mode only. Additionally, Binance noted its new Japanese platform will not provide cryptocurrency derivative services at an early stage to comply with local regulations.

SEC Sues Binance And Changpeng Zhao Over Allegations Of Violating The Securities Code. Regarding which crypto tokens will be available on the new Binance Japan platform, Binance explained that it will have a limited number of tokens available for spot trading at an early stage, and that there are limits on certain product offerings to comply with local regulations.

“We will add more products and services whenever possible. We aim to provide more than 30 tokens as a first step. We will provide updates and further information once the new token is confirmed,” Binance explained in the announcement.

In November last year, Binance said it had acquired 100 percent of Sakura Exchange Bitcoin (SEBC), a Japanese provider of cryptocurrency exchange services regulated by Japan’s top financial regulator, the Financial Services Agency.

Previously, after five years off the Japanese market, crypto exchange Binance had started the process of establishing a new, fully regulated subsidiary in the country. The move follows the acquisition of regulated crypto exchange Sakura Exchange Bitcoin (SEBC) in November 2022.

Read Also: Binance Leaves Canada After Challenging Crypto Regulations

Launch Cointelegraph, Sunday (28/5/2023), as part of the deal, SEBC will terminate its current services on May 31 and reopen as BinanceJapan in the coming weeks. Users of the exchange’s global platform in the country must register with the new entity. Migration will be available after August 1, 2023, and will include a new identity verification (KYC) process to meet local requirements.

Funds remaining on the SEBC exchange will be automatically converted to Japanese yen and transferred to users’ bank accounts starting in June, Binance said earlier.

SEC Sues Binance And Changpeng Zhao Over Allegations Of Violating The Securities Code. With the regulatory landscape shrinking, the exchange’s strategy to expand its global reach has been to acquire locally regulated entities. Binance made similar moves in Singapore in 2021, in Malaysia in 2022, and recently in Thailand. In Japan, it closed operations in 2018, after failing to secure an independent license from local regulators.

According to a notice on its website, the exchange will not provide derivative services in Japan. The global version of Binance will not accept new derivative accounts from users in that country.

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