The world’s largest cryptocurrency exchange has been running an illegal operation in the U.S., the Securities and Exchange Commission alleged in a lawsuit filed Monday.
Binance and founder Changpeng Zhao were named as defendants, the lawsuit indicated.
Zhao and the company misused customers’ funds, the SEC alleged. The company diverted the money directly to Zhao, the lawsuit stated in a case filed in the District of Columbia federal court.
The suit also alleged that Binance allowed U.S. citizens to trade on its platform, despite saying it wasn’t.
“They consistently claimed to the public that the Binance.com platform did not serve U.S. persons, while simultaneously concealing their efforts to ensure that the most valuable U.S. customers continued trading on the platform,” the lawsuit said.
“When the platform launched in 2019, Binance announced that it was implementing controls to block U.S. customers. In reality, Binance did the opposite. Zhao directed Binance to assist certain high-value U.S. customers in circumventing those controls and to do so surreptitiously because – as Zhao himself acknowledged – Binance did not want to ‘be held accountable’ for these actions.”
Zhao said in a tweet that Binance hadn’t seen the complaint.
“Our team is all standing by, ensuring systems are stable, including withdrawals, and deposits,” Zhao wrote on Twitter. “We will issue a response once we see the compliant. Haven’t seen it yet. Media gets the info before we do.”
The price of bitcoin fell after the news, declining 2.6% to $26,412 as of 11 a.m. CT, according to TradingView.