In a significant development following the recent legal action taken by the Securities and Exchange Commission (SEC) against Binance, the United States district court in Washington, D.C. issued a summons for Binance CEO Changpeng Zhao.
The summons, received by Zhao on June 7, serves as notification that a lawsuit has been filed against him in connection with the SEC’s allegations of unregistered securities operations.
What is the SEC Lawsuit against Binance
The US Securities and Exchange Commission (SEC) claims Binance and its CEO Changpeng Zhao allegedly operated unregistered securities.
The SEC court filing states that Binance allowed high-value US customers to trade on its platform. Despite restrictions, Zhao secretly controlled the US company, Binance US, behind the scenes. The SEC complaint has 13 charges which include evidence suggesting Binance’s awareness of violating US regulations.
The SEC’s lawsuit against Binance, one of the world’s largest cryptocurrency exchanges, has sent shockwaves through the industry. The regulatory organization claims that Binance offered and sold securities, including digital tokens, without properly registering them as required by federal securities laws.
Binance, in response to recent allegations, firmly denied any involvement in claims of providing “large donations” to political candidates or “siphoning off consumers’ funds” or engaging in “collateralized borrowings.”
The issuance of the summons from the district court of the US further intensifies the legal battle between Binance and the SEC, as the court system steps in to address the allegations.
The CEO is yet to respond to this notification.