On Monday, the US Securities and Exchange Commission (SEC) sued the world's largest cryptocurrency exchange Binance and its CEO Changpeng Zhao. The charges include “network of deception”, artificially inflating trading volumes and redirecting clients' assets. SEC approves, that Binance and Zhao secretly controlled clients' assets, which allowed them to mix and redirect customer funds. Besides, is accused of, that the exchange created separate US legal entities as part of a complex scheme to circumvent US federal securities laws.
The Commission also approves, that from september 2019 to June 2022 of the year trading company Sigma Chain, owned and controlled by Zhao, manipulated, artificially inflating the trading volume of crypto assets on the Binance.US platform. Binance did not immediately respond to a request for comment on the allegations.. In his tweet, Zhao stated, what will Binance say, as soon as it examines the SEC complaint, and added, that the exchange team “is in touch, ensuring system stability, including withdrawal and deposit of funds”.
Analytics of influence on the cryptocurrency market:
In light of the news, cryptocurrencies across the spectrum have fallen in price. Bitcoin fell to 2,9%, to 26,458 Dollars. Binance coin (BNB), the fourth largest market, fell by more than 5%.
The implications of this lawsuit could be profound.. Investors have already withdrawn, reportedly, about 1,6 billion dollars from Binance just days after the CFTC announced its allegations. These outflows may continue, if US regulators step up pressure on crypto companies, what can make big players, such as Binance, switch to other jurisdictions.
This event highlights the growing activity of regulators, in particular the SEC, regarding cryptocurrencies. Last year there was an increase of 50% number of regulatory actions against companies, working with digital assets, compared to 2021 year.
The loss of one of the world's largest crypto exchanges could seriously impact traders' ability to find competitive prices when buying and selling., as well as sources of liquidity. This would be bad news for retail and institutional investors., which may face a smaller and potentially more expensive market as a result.
These are the latest in a series of legal challenges for Binance, which was also sued by U.S.. Commodity Futures Trading Commission (CFTC) in March for operations, That, as stated by the regulator, Were “illegal” And “fictitious” compliance program, with Zhao, calling these accusations “disappointing” And “incomplete statement of facts”. Binance is also under investigation by the Department of Justice for money laundering and sanctions violations., according to people, familiar with the investigation.
Summarizing, this SEC lawsuit against Binance and its CEO Changpeng Zhao casts a shadow on the future of the cryptocurrency market, causing large fluctuations in the prices of cryptocurrencies and exposing investors to risks. It is important to note, what is this action – part of a larger trend towards increased regulatory oversight of cryptocurrency companies.