SEC Charges Binance and CZ

The Securities and Exchange Commission (SEC) has intensified its actions against Binance, the largest cryptocurrency exchange globally, and its founder/CEO Changpeng "CZ" Zhao. The SEC has filed 13 charges against Binance, accusing the company of deceptive practices towards customers and improper use of funds. According to the SEC, Binance had control over customer assets and used them in ways that benefited the company. It is alleged that some of these funds were diverted to a separate entity owned by Zhao called Sigma Chain, which the SEC claims engaged in manipulative trading to artificially increase trading volume on Binance.US, a platform established for U.S. users.

Evidence presented in the complaint includes a January 2021 message from a Sales Director at BAM Trading, a U.S.-based Binance affiliate, to the CEOs and other employees. The message listed 20 Binance.US account numbers, stating that they were all related to Sigma Chain. One employee reportedly responded with surprise to this information. The SEC further alleges that Binance and its affiliates mixed billions of dollars of investor funds without proper disclosure, sending them to a third party named Merit Peak Limited, also owned by Zhao.

SEC Chair Gary Gensler, in a statement, highlighted the extensive web of deception, conflicts of interest, lack of disclosure, and intentional evasion of the law involving Zhao and Binance entities. The charges include misleading investors about risk controls, manipulation of trading volumes, concealing information about platform operations and affiliated market makers, and custody of investor funds and crypto assets.

Binance responded to the allegations through a statement on its blog, denying any risk to user assets on the Binance.US platform and affirming the safety and security of all user assets on Binance and its affiliate platforms.

tastytrade logo+
Get the best broker for options trading and earn Unusual Whales discounted! in cash with an eligible account deposit at tastytrade. Get an Unusual Whales bonus when you deposit $2000. Offer expires 3/31/25. Certain restrictions, terms and conditions apply.
Unusual Whales does not confirm the information's truthfulness or accuracy of the associated references, data, and cannot verify any of the information. Any content on this site or related pages are not intended to provide legal, tax, investment or insurance advice. Unusual Whales Inc. is not registered as a securities broker-dealer or an investment adviser with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”) or any state securities regulatory authority. Nothing on Unusual Whales should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security by Unusual Whales or any third party. Options, investing, trading is risky, and losses are more expected than profits. Please do own research before investing. Please only subscribe after reading our full terms and understanding options and the market, and the inherent risks of trading. It is highly recommended not to trade on this, or any, information from Unusual Whales. Markets are risky, and you will likely lose some or all of your capital. Please check our terms for full details.
Any content on this site or related pages are not intended to provide legal, tax, investment or insurance advice. Unusual Whales Inc. is not registered as a securities broker-dealer or an investment adviser with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”) or any state securities regulatory authority. Nothing on Unusual Whales should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security by Unusual Whales or any third party. Certain investment planning tools available on Unusual Whales may provide general investment education based on your input. You are solely responsible for determining whether any investment, investment strategy, security or related transaction is appropriate for you based on your personal investment objectives, financial circumstances and risk tolerance. You should consult your legal or tax professional regarding your specific situation. See terms for more information.