The SEC Has Taken Binance to the US district court Over Unregistered Securities Operations

Binance SEC Suit

The United States Securities and Exchange Commission (SEC) has taken legal action against Binance, its U.S. platform, and CEO Changpeng Zhao (CZ), accusing them of operating illegally in the country. 

The SEC filed a lawsuit in the District Court for the District of Columbia on June 5, bringing forth 13 charges against Binance. These charges include conducting unregistered sales and offers of tokens, such as BNB and Binance USD, as well as allegations related to Binance’s staking program, Simple Earn, and BNB Vault products.

According to the suit:

“Defendants have enriched themselves by billions of U.S. dollars while placing investors’ assets at significant risk. […] Defendants have engaged in multiple unregistered offers and sales of crypto asset securities and other investment schemes.”

Additionally, the SEC alleges that funds from Binance and Binance.US were mingled in an account controlled by Merit Peak Limited, a company associated with CZ. The SEC is seeking permanent injunctions, disgorgement of ill-gotten gains with interest, and financial penalties against Binance and CZ.

Binance and Binance.US responded to the lawsuit separately, with Binance.US stating in a tweet that the SEC’s claims are an example of “regulation by enforcement” and asserting that the suit is baseless. 

In the same way, Binance, in a blog post, emphasized its cooperation with the SEC’s investigations and stated its intention to vigorously defend against the allegations. The company criticized the SEC’s actions, suggesting they were aimed at claiming jurisdictional ground and implying that investor protection might not be the SEC’s main focus.