SEC Lawsuit Case Facts to Crypto Exchange Binance

Liputan6.com, Jakarta – The US Securities and Exchange Commission (SEC) sued crypto exchange Binance, the operating company for Binance US and, Binance CEO Changpeng Zhao (CZ) on charges of violating federal securities laws last week.

Following are the facts of the SEC lawsuit against Binance and its subsidiaries.

Binance CEO’s Wealth Plummets

After being sued by the SEC, the wealth of Binance CEO Changpeng Zhao experienced a significant decline. Launching The Straits Times, Thursday (8/6/2023) Zhao’s wealth shrank by USD 1.4 billion to USD 26 billion or equivalent to Rp. 387.3 trillion (assuming an exchange rate of IDR 14,871 per US dollar) over the past two days.

As the boss of the world’s largest crypto exchange by trading volume, Zhao is one of the richest people in the crypto industry.

Mixing of Customer Funds

In its filings, the SEC accused Binance of permitting the mix-up of customer funds. Zhao is also suspected of “covertly” controlling Binance US and other entities owned by Binance to inflate the trading volume of Binance US.

According to a statement by Binance US prior to the lawsuit, Binance US is an independent company despite being a subsidiary of Binance.

Zhao allegedly directed Binance to assist certain high-value US customers in circumventing such controls and did so covertly because as Zhao himself admitted Binance did not want to be ‘responsible’ for these actions.

Some Cryptos Are Considered Securities by the SEC

The SEC has been cracking down on various cryptocurrencies that are considered securities so that they must comply with securities regulations in the US. In a lawsuit against Binance, the SEC alleged that Binance’s token, BNB coin and its stablecoin BUSD were securities.

The SEC also charged a number of other tokens, including native coins for Solana (SOL), Cardano (ADA), Polygon (MATIC), Coti (COTI) and Algorand (ALGO) blockchains, Filecoin network (FIL), Cosmos hub (ATOM), platform Sandbox (SAND), Axie infinity (AXS) and Decentraland (MANA) are securities.

Will Freeze Binance Assets

The day after the SEC filed 13 lawsuits against Binance, Zhao, and other Binance-related entities, the SEC requested a temporary restraining order to freeze assets for all parties involved.

The order is necessary to maintain the status quo, ensure the safety and availability of assets held and prevent the loss or transfer of those assets from the court’s jurisdiction in the case, which was filed with the US District.

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