By SIMA Linwei
On June 5, the US Securities and Exchange Commission (SEC) filed charges against Binance, the world’s largest cryptocurrency exchange, and its CEO, ZHAO Changpeng (known as “CZ”), for violating federal securities laws.
The SEC alleged that Zhao and Binance engaged in extensive deception, conflicts of interest, lack of disclosure, and intentional evasion of legal oversight.
Binance US and its operating company, BAM Trading, face similar allegations. The news of the charges caused turmoil in the cryptocurrency market, with Bitcoin dropping by 5.7 percent in 24 hours. Other cryptocurrency stocks, including Coinbase, also experienced declines.
Zhao called the charges an attack on the entire industry.
This regulatory crackdown follows a lawsuit filed by the Commodity Futures Trading Commission (CFTC) against Binance and Zhao in March. Both the SEC and CFTC actions are civil lawsuits, not criminal prosecutions.
Speculation about a potential leadership change at Binance puts Richard Teng, a former official at the Monetary Authority of Singapore as a possible successor to Zhao.
