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Binance CEO Zhao Changpeng (2022)
Photo: COSTAS BALTAS / REUTERS
The U.S. Securities and Exchange Commission (SEC) wants to freeze the U.S. assets of the world's largest crypto exchange Binance. The authority therefore applied to a U.S. federal court on Tuesday for a temporary injunction.
The SEC had sued Binance and its boss Changpeng Zhao on Monday. It accuses Binance of operating an unlicensed stock exchange. In addition, the company misled investors about its market surveillance controls and failed to keep U.S. customers away from its platform.
Other allegations revolve around the manipulation of stock exchange turnover with the help of bogus transactions and the diversion of customer funds. The company has also set up U.S. subsidiaries specifically to circumvent laws.
According to industry service CryptoCompare, the exchange, which was founded in 2017, processed $23 trillion in transactions last year. Binance described the allegations as unfounded: "We will vigorously defend ourselves." All customer funds at Binance and affiliated crypto exchanges such as Binance.US are safe.
Heavy price falls after lawsuit
Investors had reacted after the lawsuit on Monday, nevertheless, frightened. The cyber currency Binance Coin collapsed by a good ten percent, according to the industry service CoinMarketCap.com the fourth largest in the world with a market capitalization of about 43.7 billion dollars. Bitcoin and Ethereum lost about five percent each.
The Reuters news agency, citing the data company Nansen, reported that investors had withdrawn around $24 million within the last 780 hours. Binance.US had recorded outflows of $13 million during the same period.
U.S. financial regulators filed a lawsuit against Binance in March. The crypto exchange did not abide by rules in the U.S. financial market and operated certain businesses and services without the necessary license, the CFTC said on Monday.
jok/Reuters