The U.S. Securities and Exchange Commission (SEC) is initiating legal action against Binance and its CEO, Changpeng Zhao (CZ). According to the SEC lawsuit, Binance unlawfully solicited customers from the U.S. to trade on unregistered platforms. The regulator also claims that Binance and CZ were directly involved in the operations of Binance.US, contrary to their previous statements. The Commodity Futures Trading Commission (CFTC) has also sued Binance for operating without proper registration, violating the Commodity Exchange Act. In response to the SEC lawsuit, Binance CEO CZ stated that the company will issue a statement after reviewing the complaint.
Amidst these regulatory issues, reports suggest that Binance might see a new CEO, Richard Teng, who was recently appointed to oversee Binance’s markets outside of the United States. Binance responded to the SEC lawsuit, expressing disappointment in the SEC’s choice to file a complaint unilaterally and litigate instead of continuing the negotiation process. Binance denies all allegations that user assets on the Binance.US platform were at risk, assuring that user assets on all their platforms, including Binance.US, are safe and secure.
Binance’s statement suggests that the SEC’s actions may be driven by an attempt to exert jurisdictional control over other regulators, with investor protection not being their main focus. Binance sees itself as a globally recognized entity caught in the middle of a regulatory conflict in the United States. This development comes shortly after Binance criticized the U.S. crypto crackdown, expressing difficulties in doing business in the country.
Following Binance’s response, CZ retweeted it and responded with “Strong Together” in reaction to the community’s response.