The SEC sued crypto exhcange binance and its billionaire founder, Changpeng Zhao, alleging that they worked to attract U.S. customers, commingled investor funds with their own, and violated securities laws.
The U.S. regulator alleged that Zhao and his exchange worked to subvert "their own controls" to allow high-net-worth U.S. investors and customers to continue trading on Binance's unregulated international exchange. Binance earned $11.6 billion in revenue, most of which came from transaction fees, from June 2018 through July 2021, the complaint said. Since its inception, the exchange has "at first overtly and later furtively" worked to entice U.S. customers, at the direction and control of its founder Zhao, the SEC alleged.
"We do need to let users know that they can change their KYC on Binance.com and continue to use it. But the message, the message needs to be finessed very carefully because whatever we send will be public. We cannot be held accountable for it," Zhao allegedly told his top team in 2019.by saying "4," a popular refrain in Binance's community urging users to ignore fear, uncertainty, and doubt, or "FUD.
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