SEC lawsuit alleges Binance.US and Changpeng Zhao placed customer funds at’significant risk’

SEC lawsuit alleges Binance.US and Changpeng Zhao placed customer funds at’significant risk’

In one of its latest filings, the SEC claims that billions of dollars of Binance customer funds were at the “mercy of Binance CEO Changpeng Zhao.”


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The United States Securities and Exchange Commission has filed a new document in its suit against Binance.US. It claims that investors’ funds are on the line.

In a filing filed on June 5, regulators claimed that defendants including Binance CEO Changpeng Zhao, BAM Management and BAM Trading, as well as Binance, had “enriched themselves with billions of dollars U.S. while placing investor’s assets at risk.”

The defendants are accused of “purposeful efforts” in order to circumvent U.S. regulations while providing services related to securities to U.S. customers.

“[This] places the safety of billions in U.S. investors capital at risk, and Binance and Zhao are at their mercy.”

CNBC’s report claims that the SEC’s amount is as high as $2.2 Billion.

The filing gives an example where billions of dollars in customer funds from Binance and Binance.US were “commingled”, in an account run by Merit Peak Limited, a “Zhao-controlled entity.”

The statement said that funds were transferred to a ‘third party in connection with the sale and purchase of crypto assets.

Related: SEC Gensler claims a ‘parallels between Binance and FTX but one was not sued

Regulatory authorities claim that Zhao has had “free reign” to manage billions of dollars in assets deposited on Binance.US, and this arrangement continues, “without any oversight or controls.”

Binance.US said at the time this article was written that funds held by users on the platform were “safe” despite the SEC trying to freeze assets.

The U.S. regulators have filed a motion to halt Binance’s operations due to the mishandling of user funds. One of the actions requested in the motion was the freezing of assets.

In its lawsuits filed against Binance Coinbase, the regulator has classified at least 67 different cryptocurrency as security. The regulator has labeled more than 100 billion dollars worth of tokens on the market as securities.

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