Binance news us customers11/30/2023 ![]() ![]() The complaint says that CZ was “free to and did transfer investors’ crypto and fiat assets as pleased, at times commingling them and diverting them in ways that properly registered brokers, dealer and exchanges” are barred from doing.ĬZ allegedly commingled billions in customer funds with those of Merit Peak Limited, a trading company he used to trade directly with customers through a program called “Binance OTC.” In addition, Binance says that “any allegations that user assets on the Binance.US platform have ever been at risk are simply wrong” and that “all user assets on Binance and Binance affiliate platforms, including Binance.US, are safe and secure, and we will vigorously defend against any allegations to the contrary.” Accusations of self-dealingĪs an unregistered exchange, the SEC has limited ability to oversee Binance’s operations, and the agency alleges that this enabled CZ to do what he wished with customer assets that were stored on the platform. “As alleged, Zhao and Binance misled investors about their risk controls and corrupted trading volumes while actively concealing who was operating the platform, the manipulative trading of its affiliated market maker, and even where and with whom investor funds and crypto assets were custodied,” he added.īinance responded to the enforcement action in a blog post in which it chided the regulator for bringing the complaint after Binance “engaged in extensive good-faith discussions to reach a negotiated settlement to resolve their investigations.” “Through thirteen charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law,” SEC Chairman Gary Gensler said in a Monday statement. "So fail not at your peril, Binance.The complaint also alleges that Zhao, known in the crypto world as “CZ”, exercised control over customer assets and commingled them with personal and company holdings. "Should any Binance defendant violate any provision of this order, US DOJ could step in and file obstruction-related charges," Stark observed. and whether there are sufficient assets to satisfy customer liabilities or meet customer claims for customer assets held on their behalf within 10 calendar days of service of such request."īinance.US must also make sure that no access or control of assets is given to Binance, its CEO Changpeng Zhao, "or any Zhao- owned or Zhao-controlled entity."įinally, Binance.US will have to provide the SEC monthly reports covering its "ordinary course businesses expenses."Īll of this is established as the SEC's civil action proceeds to trial, for which Judge Jackson provides 90 days of "expedited discovery" by the SEC. Binance must also produce a record of asset transfers greater than $1,000 in value in that same time period, along with recipient names and reasons for the transfer.Īs for the SEC's concerns over Binance.US solvency, the agreement demands information on "encumbrances or limitations that would make them unavailable for transfer or withdrawal by customers. ![]() The agreement gives Binance 45 days to provide to the SEC a list of every account or wallet under its management since December 1, 2022, along with associated financial institutions and account numbers.
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