- The SEC’s lawsuit against Binance and its founder Changpeng Zhao revealed the extent of the latter’s influence on Binance US.
- Binance US has historically been marketed as a platform that operated independently from the international exchange.
- Crypto experts believe that Zhao will stay away from the United States and countries that have strong extradition treaties with the US.
The U.S. Securities and Exchange Commission’s lawsuit against Binance, Binance US, and their founder Changpeng Zhao has alleged that Zhao was heavily involved in the operations of the exchange’s American arm. Binance US, which was touted as an independent entity, allegedly had CZ pulling the strings.
Crypto influencer Compound248 took to Twitter earlier today to share their analysis of the contents of SEC’s complaint. The securities regulator’s core claim is that Changpeng Zhao and Binance knowingly operated an illegal and unregistered securities business in the United States. The SEC believes that by doing so, Zhao and his exchange prevented American investors from having access to investor and market protection laws.
The SEC has made several controversial allegations against Binance’s billionaire founder Changpeng Zhao. The majority of them revolve around Zhao misrepresenting Binance US’ operations and being heavily involved in the American exchange’s operations, despite touting it as an independent entity that was free from the international exchange’s influence.
The SEC has cited multiple testimonies from former employees of BAM Trading, the wholly owned subsidiary of Binance that operated Binance US. Several high-ranking employees acknowledged that the American exchange may be violating local securities laws. Employees also complained about CZ’s undue influence over the exchange’s operations.
CZ was allegedly aware that Binance US was operating in a gray area and was expecting enforcement action at some point. Compound248 believes that Zhao will not step foot in the US in light of the lawsuit. The Binance founder may also stay away from countries that have strong extradition treaties with the US.
The SEC’s latest lawsuit is arguably the most high-profile event in the crypto industry this year. By suing the world’s largest crypto exchange and its affiliates, the securities regulator has set the tone for what fellow crypto giant Coinbase can expect in potential enforcement action.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
