Key Takeaways

• The SEC has filed 13 charges against Binance and its founder, Changpeng Zhao, for alleged violations of securities laws.
• The SEC alleges that Binance covertly allowed high-value U.S. customers to trade on its platform, which is a violation of U.S. securities laws.
• The SEC also claims that Zhao exercised control over customer assets and mixed them with his personal and company holdings.

The U.S. Securities and Exchange Commission (SEC) has filed 13 charges against Binance Holdings Inc. and its founder, Changpeng Zhao, also known as CZ, for alleged violations of securities laws. The SEC claims that Binance, the world’s largest cryptocurrency exchange, covertly permitted high-value U.S. customers to trade on its platform, which is a violation of U.S. securities laws that prohibit unregistered exchanges from servicing U.S. customers.

The SEC also alleges that Zhao exercised control over customer assets and mixed them with his personal and company holdings. SEC Chairman Gary Gensler stated that Zhao and Binance are accused of engaging in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law. The charges come at a time when cryptocurrencies Bitcoin and Ether are experiencing a downturn in their trading values.