Binance operating a web of deception says Securities and Exchange Commission

Category: Americas Crypto Fintech

The US Securities and Exchange Commission  has accused crypto exchange Binance and its founder Changpeng Zhao of operating a “web of deception”. Zhao has been charged with 13 offences.

Crypto crackdown

The SEC is focussing on a wider crypto crackdown, prompted by the collapse last year of the Bahamas-based FTX, whose founder, Sam Bankman-Fried, has now been charged with securities fraud, money laundering and other offences.

Binance handles billions in investments for many investors, but the repercussions of the accusations by the SEC may lead to a domino effect as the company sponsors Italian football teams Lazio and the national football team of Argentina. The company also sponsored the 2021 Africa Cup of Nations tournament. Its interests include a number of high profile VC investments, start up projects and  a US $500 million stake in Elon Musk’s empire.

This week the SEC has also accused the crypto platform of putting customers at risk by operating as an “unregistered broker, exchange and clearing agency”.

Binance accounts for 50% of crypto market

Binance is the world’s largest cryptocurrency exchange where digital assets are traded in exchange for a fee. Last year its trades accounted for up to 70 percent of the market, with billions of dollars traded through the exchange every day.

Since the market has become more regulated, the company’s market share has fallen but it still accounts for nearly 50 percent of crypto exchange volume.
In 2019, Binance faced a number of regulatory-related penalties over a number of potential violationsand launched a new business, Binance.US.

Binance.US offered fewer crypto and digital assets than its parent company as an entirely separate exchange that was run independent of

Among the products that Binance.US is alleged to have illegally offered its US customers are commodity derivatives, which place a bet on the price of a cryptocurrency rather than buying it. This was anohter violation as Binance are not registered with the derivatives markets regulator.

News of the SEC charges sent the price of bitcoin,  the largest and most commonly traded crypto asset,  to its lowest point in almost three months.

The UK Prime Minister, Rishi Sunak, is been a supporter of the sector and has encouraged the issue of Central Bank’s digital currency in the form of stablecoins by the Bank of England. However, stricter regulation is now also being considered in the UK with MPs calling for cryptocurrencies to be regulated as a form of gambling.

Related topics:

Theranos Court Case 

Stop Press!  AIBC Americas Summit takes place in Brazil this month

Budapest, Hungary event


Budapest, Hungary

02 - 04 September 2024