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The Securities and Exchange Commission charged Binance Holdings Inc. and its founder Changpeng Zhao with 13 securities law violations, the regulator announced Monday.
The SEC alleges that Binance, the world’s largest cryptocurrency exchange, “secretly allow[ed] high-value U.S. customers” to trade on the platform in violation of U.S. securities laws which bar unregistered exchanges from servicing U.S. customers.
The complaint also alleges that Zhao, known in the crypto world as “CZ”, exercised control over customer assets and commingled them with personal and company holdings.
“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 Chairman Gary Gensler said in a Monday statement.
“As alleged, Zhao and Binance misled investors about their risk controls and corrupted trading volumes while actively concealing who was operating the platform, the manipulative trading of its affiliated market maker, and even where and with whom investor funds and crypto assets were custodied,” he added.
Binance did not immediately return a request for comment.
Major cryptocurrencies bitcoin
BTCUSD,
and ether
ETHUSD,
were trading lower Monday.
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