In a blog post on Monday, Binance said its leaders had been trying to negotiate a settlement with regulators and were “disappointed” and “disheartened” by the S.E.C.’s decision to bring a case. dollars while placing investors’ assets at significant risk,” regulators said in the civil lawsuit, which was filed in Federal District Court in Washington. Zhao “enriched themselves by billions of U.S. U.S.-based customers were supposed to have access only to an ostensibly separate company formed specifically to operate within the United States, called Binance.US.īinance and Mr. users from trading on its international platform. The complaint also said Binance had misled investors about the adequacy of its systems to detect and control manipulative trading and about its efforts to restrict U.S. said Binance had mixed billions of dollars in customer funds and secretly sent them to a separate company, Merit Peak Limited, which is controlled by Binance’s founder, Changpeng Zhao. Regulators have long seen the exchange, which has said it does $65 billion in average daily trading volume, as a major target in their quest to bring to heel a crypto industry that has been built around an explicitly anti-government ethos. The S.E.C.’s lawsuit was the second time this year that federal regulators have accused Binance of evading laws designed to protect investors in the United States. The Securities and Exchange Commission on Monday accused Binance, the world’s largest cryptocurrency exchange, of mishandling customer funds and lying to American regulators and investors about its operations, in a sweeping case that has the potential to remake the landscape of power and wealth within crypto.
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