Another Cryptocurrency Exchange Faces SEC Scrutiny and Legal Action

On June 5, multiple media outlets reported that the Securities and Exchange Commission (SEC)
filed a lawsuit against Binance, the world’s largest cryptocurrency exchange. The New York
Times stated that the SEC accused the exchange of “mishandling customer funds and lying to
American regulators and investors about its operations.” Additionally, the SEC alleged that
Binance “engaged in manipulative trading that artificially inflated the platform’s trading volume”
through a firm called Sigma Chain, which is owned by Binance CEO Changpeng Zhao (known
online by his initials “CZ”).

In a scheme not too dissimilar from FTX’s relationship with Alameda Research, the SEC alleged
that Binance “had mixed billions of dollars in customer funds and secretly sent them to a
separate company, Merit Peak Limited,” a third-party investment firm also owned by Zhao.
These transfers were done without customers’ knowledge, placing millions of customer funds at
risk of loss or theft.

Not only did Zhao and Binance leadership recklessly disregard federal law, but they also
knowingly evaded legal scrutiny and accountability and, as a result, put their customers at risk of
immense financial losses. Moreover, even though Zhao was not legally allowed to have
ownership of Binance’s U.S. affiliate, Binance.US, he remained secretly involved through an
unregistered securities broker called BAM Trading, which was also named in the SEC’s lawsuit.

If you have suffered financial losses or asset depreciation after exchanging currency on Binance
or another cryptocurrency exchange platform, you might be eligible to take part in an
investigation regarding potential legal action. Selinger Law Group is currently looking into
potential fraudulent behavior from cryptocurrency exchanges and is offering free consultations to
individuals who have been affected. Call 1-800-928-9445 today to get the help you need toll free.