Wall Street’s main regulator, the SEC, accused Binance Holdings Ltd. and Changpeng Zhao, its chief executive officer, of breaking U.S. securities rules, a major escalation in the legal woes facing the crypto exchange.
In a case filed in U.S. federal court on Monday, the Securities and Exchange Commission alleged that the firm flouted investor protection rules by operating unregistered exchanges, misrepresenting trading controls and selling unregistered securities, among other violations.
“Through thirteen charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law,” SEC Chair Gary Gensler said in a statement. “The public should beware of investing any of their hard-earned assets with or on these unlawful platforms.”
A representative for Binance didn’t immediately respond to a request for comment. On Twitter, Zhao said his team would review the complaint.
The case follows a lawsuit from the U.S. derivatives watchdog in March that alleges Binance and Zhao routinely broke its rules. At the time, the exchange and Zhao defended their compliance efforts and called the lawsuit by the Commodity Futures Trading Commission disappointing, while also pledging to keep working with regulators.
The SEC has for months been probing whether Binance illegally sold digital coins as the exchange was getting off the ground in 2017. The token, which is known as BNB, is now among the world’s largest.
A virtual currency may fall under the SEC’s remit if investors buy it to fund a company or project with the intention of profiting from those efforts. That determination is based on a 1946 U.S. Supreme Court decision defining investment contracts.
New chief executive Rich Steinmeier replaced Dan Arnold on October 1.
The global firm is navigating a crisis of confidence as an SEC and DOJ probe into its Western Asset Management business sparked a historic $37B exodus.
Beyond returns, asset managers have to elevate their relationship with digital applications and a multichannel strategy, says JD Power.
New survey finds varied levels of loyalty to advisors by generation.
Busy day for results, key data give markets concerns.
A great man died recently, but this did not make headlines. In fact, it barely even made the news. Maybe it’s because many have already mourned the departure of his greatest legacy: the 60/40 portfolio.
Discover the award-winning strategies behind Destiny Wealth Partners' client-centric approach.