The SEC’s court complaint emphasizes Binance’s blatant disregard for federal securities laws and investor protections.
Kurt Gottschall, a former head of the SEC’s Denver office and partner at Haynes and Boone LLP, stated, “This will be a landmark case. The SEC appears to be very concerned about the commingling of customer funds.”
This lawsuit is not the first regulatory challenge Binance has faced in the United States.
Last year, The Wall Street Journal reported that the SEC had been investigating Binance’s relationship with Sigma Chain and Merit Peak. The Commodity Futures Trading Commission (CFTC) accused Binance and Zhao of evading its rules governing platforms offering derivatives to American traders.
The Justice Department is also conducting an investigation into Binance’s anti-money laundering program.
SEC lawsuit
The SEC’s complaint seeks to freeze Binance’s assets and appoint a receiver to oversee the company. Receivers are typically independent professionals tasked with safeguarding users’ assets in cases involving fraud or when regulators doubt a company’s ability to comply with the law.
