S.E.C. Accuses Binance of Mishandling Funds and Lying to Regulators (Published 2023) (2024)

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S.E.C. Accuses Binance of Mishandling Funds and Lying to Regulators (Published 2023)? ›

WASHINGTON (AP) — The world's largest cryptocurrency exchange Binance and its founder Changpeng Zhao are accused of misusing investor funds, operating as an unregistered exchange and violating a slew of U.S. securities laws in a lawsuit filed by the SEC.

The CFTC brought civil proceedings against Binance in March 2023 for failing to put in place an anti-money laundering program that would have identified and stopped dirty money transactions such as the financing of terrorism and illicit drug sales.

The regulator accused Binance, its CEO and founder Changpeng Zhao and the exchange's U.S. arm of artificially inflating its trading volumes, diverting customer funds, failing to restrict U.S. customers from its platform and misleading investors about its market surveillance controls.

Changpeng Zhao, the former head of the world's largest cryptocurrency trading company, was sentenced to four months in jail on Tuesday in a Seattle courtroom. Zhao pleaded guilty late last year to money-laundering violations and stepped down as CEO of Binance. The company itself was fined $4.3bn.

Binance's founder and chief executive officer (CEO), Changpeng Zhao, a Canadian national, also pleaded guilty to failing to maintain an effective anti-money laundering (AML) program, in violation of the BSA and has resigned as CEO of Binance.

US's majority beneficial owner and control person, Changpeng Zhao, plead guilty to felony charges stemming from his willful violations of U.S. anti-money laundering and sanctions law. Due to the nature of the felonies committed by Zhao, the Division has revoked Binance.

Binance and exchanges including Kraken are being sued at London's Competition Appeal Tribunal (CAT) in a case brought on behalf of over 200,000 BSV owners. Lawyers representing BSV Claims, a vehicle set up to pursue the case, say the exchanges engaged in anti-competitive behaviour to delist BSV in 2019.

The CEO of Binance Holdings Limited (aka Binance), the largest cryptocurrency exchange in the world, pleaded guilty in November 2023 and agreed to pay $4 billion to resolve the investigation into violations related to the Bank Secrecy Act (BSA)—i.e., failure to register as a money-transmitting business.

Binance, which has no designated global headquarters, has courted controversy worldwide. In November 2023, its founder and erstwhile chief executive Changpeng Zhao pled guilty to money laundering charges by the US Securities and Exchange Commission.

SEATTLE, April 30 (Reuters) - Changpeng Zhao, the former chief executive of Binance, was sentenced on Tuesday to four months in prison after pleading guilty to violating U.S. laws against money laundering at the world's largest cryptocurrency exchange.

Is Binance under investigation? ›

Binance Holdings Limited (Binance), the entity that operates the world's largest cryptocurrency exchange, Binance.com, pleaded guilty today and has agreed to pay over $4 billion to resolve the Justice Department's investigation into violations related to the Bank Secrecy Act (BSA), failure to register as a money ...

Binance was founded in 2017 by Changpeng Zhao, a developer who had previously created high-frequency trading software.

Binance Nigeria has announced plans to cease all services in naira, the country's local currency, from March 8, 2024. The cryptocurrency platform announced the decision on its website on Tuesday. According to Binance, naira withdrawals will be officially suspended after March 8.

Binance, which has no designated global headquarters, has courted controversy worldwide. In November 2023, its founder and erstwhile chief executive Changpeng Zhao pled guilty to money laundering charges by the US Securities and Exchange Commission.

Here are some possible consequences of a Binance shutdown: A sharp drop in the prices of #bitcoin and other cryptocurrencies. Binance accounts for a large share of the global crypto trading volume and liquidity. If Binance were to cease operations, it would create a supply shock and a panic sell-off in the market.

'Web of deception'

In the June lawsuit, the SEC filed 13 charges against Binance, accusing the exchange of mishandling customer funds and offering registered securities, alleging that the company and founder Changpeng Zhao had engaged in an “extensive web of deception.”