The agency is accusing the world’s largest crypto exchange of operating a ‘web of deception’, inflating trading volumes and diverting customer assets.
The world’s largest cryptocurrency exchange Binance and its CEO Changpeng Zhao operated a “web of deception” that included artificially inflating its trading volumes and diverting customer assets, the US Securities and Exchange Commission alleged on Monday. The agency on Monday sued Binance and Zhao for failing to restrict US customers from its platform and misleading investors about its market surveillance controls, as well as for operating an unregistered securities exchange. The SEC’s complaint, filed in federal court in Washington, also alleged that Binance and Zhao secretly control customers’ assets, allowing them to commingle and divert customer funds, and that Binance created separate US entities “as part of an elaborate scheme to evade US federal securities laws”. The SEC also alleged that from at least September 2019 until June 2022, Sigma Chain, a trading firm owned and controlled by Zhao, engaged in wash trading that artificially inflated the trading volume of cryptocurrency asset securities on the Binance.
