U.S. Sues Binance, Founder Changpeng Zhao For Fraud

US regulators sued Binance and its CEO Changpeng Zhao for allegedly operating a "web of deception," piling further pressure on the world's biggest cryptocurrency exchange and sending bitcoin to its lowest in almost three months, Hannah Lang, Jonathan Stempel and Tom Wilson reported for Reuters.

Photo Insert: From almost three years ago until June 2022, a trading firm owned and controlled by Zhao, Sigma Chain, engaged in so-called wash trading that artificially inflated the trading volume of crypto asset securities on the Binance.US platform

The Securities and Exchange Commission (SEC) complaint, filed in a federal court in Washington, D.C., listed 13 charges against Binance, Zhao, and the operator of its purportedly independent US exchange.

The SEC alleged that Binance artificially inflated its trading volumes, diverted customer funds, failed to restrict US customers from its platform, and misled investors about its market surveillance controls.

SEC also claimed that Binance and Zhao, its billionaire founder and one of the crypto industry's highest-profile moguls, secretly controlled customers' assets, allowing them to commingle and divert investor funds "as they please."

Binance created separate US entities "as part of an elaborate scheme to evade US federal securities laws," the SEC also alleged, citing a number of practices first reported by Reuters in a series of investigations into the exchange published this year and in 2022.

From almost three years ago until June 2022, a trading firm owned and controlled by Zhao, Sigma Chain, engaged in so-called wash trading that artificially inflated the trading volume of crypto asset securities on the Binance.US platform, the SEC also alleged. Sigma Chain spent $11 million from an account on a yacht, the SEC said.

WEEKLY FEATURE : MVP Group Keeps Lights On During Pandemic