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Anvi Saini
Anvi Saini
Jun 6, 2023

SEC Files Lawsuit Against Binance for Alleged Illegal Operations and Investor Fraud

The US Securities and Exchange Commission (SEC) has filed a lawsuit against Binance, the world's largest cryptocurrency exchange, along with its founder, Changpeng Zhao.
SEC Files Lawsuit Against Binance for Alleged Illegal Operations and Investor Fraud

SEC Charges Unregistered Investment Schemes 

The SEC claims that Binance and Zhao have enriched themselves with billions of dollars while jeopardizing the assets of investors in a lawsuit that began with serious accusations. The allegations include illegal investor solicitation, participation in unregistered investment schemes, and misleading investors about the Binance.US Platform's surveillance and control over manipulative trading.

Binance responded to the lawsuit by expressing dissatisfaction and stating that they are actively cooperating with the SEC's investigations. Rather than directly responding to the SEC's allegations, Binance criticized the agency for its enforcement-focused approach, claiming it fails to take into account the complexities of the technology involved.

Binance Accused of Lacking Market Controls

The SEC's lawsuit details Binance's alleged violations, claiming that the exchange operated without proper registration as a broker-dealer, exchange, and clearing agency. Furthermore, the BUSD token and Binance's BNB token were identified as securities that should have been registered by the agency. The SEC believes Binance's actions were intended to evade regulatory oversight.

Despite Binance's previous claims that Binance.US operated independently from the main exchange and did not serve US customers, the SEC claims that valuable investors were directed to circumvent controls designed to limit their access to the platform.

Furthermore, despite claiming otherwise to investors, the lawsuit highlights Binance's failure to implement adequate market manipulation controls. The lack of measures to prevent fraudulent activities such as "wash trading" is specifically mentioned, revealing a failure to comply with registered exchange requirements.

The SEC's legal action against Binance has significant ramifications for the exchange's and the cryptocurrency industry's future. As the lawsuit progresses, the cryptocurrency community anticipates further developments and potential ramifications for Binance's operations and reputation.

It is important to note that the allegations in the lawsuit are currently being investigated and are subject to legal action. This article is based on the most up-to-date information available at the time of writing and may be subject to updates or changes as the situation develops.

Disclaimer: The information provided on this page do not constitute investment advice, financial advice, trading advice, or any other sort of advice and you should not treat any of the website's content as such. Individuals should do their own research before taking any actions related to the product they read about and carry full responsibility for their decisions.
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