2023-06-06 18:44:30
The US financial market watchdog, the Securities and Exchange Commission, has sued Binance, the world’s largest cryptocurrency exchange, and its president, Chang Bing Zhao, for circumventing the laws.
According to the document filed with a federal court in Washington on Monday, Binance allowed US residents to use its platform, while the company is not registered with US authorities. This is a new attack on the Binance platform as part of a series by the US Financial Products Regulatory Authority (CFTC), which began at the end of March for similar reasons.
This news caused Bitcoin, the most important cryptocurrency in terms of traded value (more than $500 billion), to decline by nearly 2 percent within minutes. As for Binance, the cryptocurrency associated with the Binance platform and the fourth digital currency in global valuation, it lost more than 5 percent of its value in less than an hour.
“Our team is ready to ensure the stability of our systems, including withdrawals and deposits,” Zhang Bing Zhao wrote on his Twitter account. He continued, “We will respond to the summons as soon as we see the document.”
The Securities and Exchange Commission takes the Binance platform not to register it, its cryptocurrencies such as BNB, or its other financial products in the United States. The regulator asserts that, contrary to what Binance has made public, its American branch and the funds deposited in it by customers were subject to the control of the parent company.
Gary Gensler, Chairman of the Securities and Exchange Commission, announced in a statement that “Changbang Zhao and entities affiliated with (Binance) are responsible for fraud, conflicts of interest, lack of transparency, and willful circumvention of the law,” noting that “through 13 charges, we allege that Zhao and ( Binance) engaged in running an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law…” He explained, “Zhao and his platform not only knew the rules, but chose to deliberately circumvent them, putting customers and investors at risk.”
Gensler months ago adopted a punitive approach with major cryptocurrency exchanges that are not registered with the Securities and Exchange Commission. In the absence of a vote on a regulatory framework in Congress, the cryptocurrency market is regulated by the Securities and Exchange Commission, which the CFTC objects to.
Cryptocurrency crises are not limited to Binance. Last week, investors accused Tesla CEO Elon Musk of manipulating the Dogecoin cryptocurrency, costing them billions of dollars, in a class action lawsuit.
In the filing, filed Wednesday in Manhattan federal court, the investors said Musk used Twitter, paid online influencers, his 2021 appearance on NBC’s “Saturday Night Live” and other “publicity tricks” to trade He makes profits at their expense in a number of Dogecoin wallets controlled by him or Tesla.
This included the $124 million sale of a Dogecoin catcher, investors said, in April following he replaced the blue bird logo on Twitter with a Shiba Inu Dogecoin logo, resulting in a 30 percent jump in Dogecoin’s price. Musk bought Twitter last October.
The file stated that “a deliberate approach of publicity stunts, market manipulation and insider trading” enabled Musk to defraud investors and promote himself and his companies. Alex Spiro, Musk’s attorney, declined to comment.
Investors accused Musk, who is the second richest person in the world according to Forbes magazine, of intentionally raising the price of Dogecoin by more than 36,000 percent over two years and then letting it collapse. The investors included their latest accusations in a proposed third, amended complaint, in a lawsuit that began in June.
Musk and Tesla sought in March to have the second amended complaint dismissed, and on May 26 they said there was no justification for another amendment. In an order issued last Wednesday, US District Judge Alvin Hellerstein said he would “probably” approve the third amended complaint.
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