The legal skirmish between the U.S. Securities and Exchange Commission (SEC) and Binance, one of the world's largest cryptocurrency exchanges, escalated today as the SEC filed new accusations against Binance, its U.S. subsidiary Binance.US, and CEO Changpeng "CZ" Zhao. The SEC staunchly opposed Binance's recent plea for dismissal of the lawsuit, accusing them of security law violations and fraudulent activities.
John Reed Stark, a cybersecurity expert, highlighted these developments in a post today, sharing a screenshot of the SEC's opposition to Binance's unlicensed U.S operations. Stark forecasted a legal defeat for Binance, given the compelling nature of the SEC's arguments. He pointed out that the SEC has accused Binance of intentionally violating federal securities laws while acting as a broker, dealer exchange, and clearing agency.
Furthermore, the document alleges that Zhao and Binance orchestrated a scheme to falsely depict their non-operation in the U.S., while secretly profiting from its capital markets and exerting control over operations to such an extent that employees felt manipulated.
The SEC's lawsuit against Binance, Zhao, and Binance.US originated in June 2023 over allegations of listing unregistered securities. It has since evolved into a complex dispute over access to U.S customer funds. Despite these accusations, Binance maintains that the SEC is overstepping its jurisdiction.
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