SEC Accuses Binance of Mishandling Funds and Lying To Regulators
The Wall Street regulator said Binance had been mixing "billions of dollars" in customer funds and secretly sending them to a separate company controlled by Binance's founder, Changpeng Zhao. The charges included misleading investors about the adequacy of its systems to detect and control manipulative trading. Regulators also said Binance did not take sufficient steps to restrict U.S. investors from accessing Binance's unregulated exchange.
"We allege that Zhao and the Binance entities not only knew the rules of the road, but they also consciously chose to evade them and put their customers and investors at risk," said Gurbir S. Grewal, director of the S.E.C.'s enforcement division. The nation's top securities regulator filed 13 charges against Binance and Mr. Zhao, better known in the crypto world as "C.Z." The S.E.C. is taking action a little over a month after the Commodities Futures Trading Commission filed its own civil enforcement action against Binance and Mr. Zhao.