The prices of Bitcoin and the rest of the cryptocurrencies remain in the red after the United States Securities and Exchange Commission (SEC) made public a complaint against the world's leading cryptocurrency platform, Binance. He accuses herof mishandling funds and lying to regulators.
This Tuesday, Bitcoin continues to lose positions and trades at US $ 25,496.90, which means a loss of almost 5%. On Monday after the news broke, it fell to the lowest since last March, US $ 25,491. Other cryptocurrencies showed even bigger declines: BNB (-9.7%), Solana (-10.1%), Cardano (-8.4%), Polygon (-7.3%), Filecoin (-10.9%), Cosmos (-7.5%), Sandbox (-12.1%), Decentraland (-9.3%), Algorand (-9.8%) and Axie Infinity (-7.5%).
In its lawsuit, the SEC alleged that certain cryptocurrencies listed on Binance.com and Binance.US were offered and sold as tradable securities, a move that could have broad implications for other exchanges offering these tokens, hitting their listing hardest.
In a 136-page filing in U.S. federal court in Washington, the SEC pointed to a series of alleged violations against the world's largest crypto exchange and its CEO, Changpeng Zhao.
"Through thirteen charges, we allege that the Zhao and Binance entities engaged in an extensive network of deception, conflicts of interest, non-disclosure, and calculated evasion of the law. The public should be careful not to invest any of their hard-earned assets in these illegal platforms," SEC Chairman Gary Gensler said in post-filing statements.
They also emphasized that the SEC was "wrong" in failing to provide clarity on rules for digital assets. "While we take the SEC's allegations seriously, they should not be subject to SEC enforcement action, let alone in an emergency. We intend to defend our platform vigorously," the company said in a statement.
Binance claimed to have "actively cooperated with the SEC's investigations" and that today's lawsuit "demonstrates its reluctance to engage with us to resolve" the SEC's concerns. "Today, despite our efforts to achieve that compromise, the SEC denied us due process and instead unilaterally chose to litigate."
"We will continue to cooperate with regulators and lawmakers in the U.S. and around the world because that's the right thing to do. Binance remains committed to ensuring that the next generation of cryptocurrency regulation fosters innovation while implementing and ensuring important consumer protections," the company's statement underlined.
Among other allegations, the SEC said two tokens pegged to Binance — BNB and BUSD — were securities the firm improperly offered and sold. It also alleged that Binance and its subsidiary in the United States were not really independent of each other and malfunctioned as an exchange, broker-dealer and clearing agency without registering with the agency.
"While Zhao and Binance publicly stated that Binance.US was created as a separate and independent trading platform for U.S. investors, Zhao and Binance secretly controlled the platform's operations Binance.US behind the scenes," the SEC said.
The case follows a lawsuit by the U.S. derivatives regulator that, in March, alleged that Binance and Zhao routinely broke its rules.
According to the regulator, the company made "deliberate efforts to evade U.S. regulatory oversight. and, at the same time, providing securities-related services to clients puts at risk the safety of billions of dollars of capital from U.S. investors and at the mercy of Binance and Zhao."
He also accused Binance of misleading investors about the controls in place at the US entity to prevent manipulative trading.
"The alleged controls were virtually non-existent," the lawsuit says, alleging that from at least September 2019 to June 2022, Sigma Chain, a trading company owned and controlled by Zhao, used the laundering trade to artificially inflate Binance.US's trading volume.
The SEC has been investigating for months whether Binance illegally sold digital currencies as the exchange took off in 2017, Bloomberg reported.
In the lawsuit, the SEC also alleged that certain tokens, including SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI, were traded on Binance.com and Binance.US offered and sold as securities, a move that could have broad implications for other exchanges offering these tokens.