US SEC Takes Aim At Binance's Ex-CCO For Willful Violation

SEC Quotes Binance’s CCO As Evidence

According to the lawsuit, Binance’s CCO back in 2018 held significant authority within the company, effectively operating the billion-dollar exchange with current CEO Changpeng Zhao, to avoid any form of regulatory scrutiny. The lawsuit paints a gloomy picture of the crypto exchange that allegedly prioritized evading regulations over compliance. The SEC’s lawsuit cites incriminating conversations within Binance, revealing the knowledge of operating in violation of numerous U.S. laws, including federal securities laws.

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Binance’s CCO was allegedly recorded stating in December 2018, “we are operating as a fking unlicensed securities exchange in the USA bro.” The suit further claims that Binance’s top compliance officer admitted to intentionally avoiding regulation, stating, “we do not want [Binance].com to be regulated ever.”

Binance Accused Of Evading Regulations

The SEC’s allegations primarily focus on Binance’s creation of a separate U.S. trading operation, purportedly meant to cater exclusively to American customers and comply with U.S. regulations. However, the suit claims that this move was merely a facade, as the Binance exchange continued to allow U.S. customers to trade on loosely regulated overseas exchanges, thus circumventing American regulatory requirements.

In a written statement released by the financial watchdog, SEC Chief Gary Gensler, was quoted as saying:

[Zhao and Binance] engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law.

Binance, a Cayman Islands limited liability company founded by Zhao, now faces charges that are reminiscent of the practices exposed after the collapse of the second-largest cryptocurrency exchange, FTX, last year. The SEC’s lawsuit contends that Binance and its founder were well aware of the legal violations they were committing, acknowledging the existential risks posed to their business.

As reported earlier on CoinGape, Binance has formally responded to the allegations stating that the firm had been cooperating with the SEC’s investigation but the federal agency “chose to act unilaterally and litigate.”

Also Read: BNB Price Tumbles 8% On SEC Lawsuit Against Binance, Market Fears Further Impact

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