The United States Securities and Exchange Commission (SEC) has sued Binance Exchange and its Chief Executive Officer, Changpeng “CZ” Zhao for the violation of US securities laws. According to a Bloomberg report, both the trading platform’s international and US operations were named in the suit.
The lawsuit, which has long been predicted, has stirred a lot of uproar in the crypto ecosystem with the price of Binance Coin (BNB) bearing the brunt of the lawsuit. The digital currency, renowned for its role in facilitating the operations of Binance Exchange is now changing hands at a price of $289, down by 5.47% over the past 24 hours.
CZ Responds, Calms Community
While much details have not been released by the Binance CEO, the crypto veteran shared a brief tweet promising His more than 8.4 million followers that there are dedicated teams in place to ensure that deposits and withdrawals are working normally.
The Binance boss who is on his way out of the exchange as the CEO, according to earlier reports, noted that he has not seen the complaints yet and that a response will be issued when he and his team receive the complaint from the market regulator.
Our team is all standing by, ensuring systems are stable, including withdrawals, and deposits.
We will issue a response once we see the compliant. Haven’t seen it yet. Media gets the info before we do.
— CZ 🔶 Binance (@cz_binance) June 5, 2023
Binance Crackdown by the SEC: an Unusual Event
The crackdown on Binance Exchange by the US SEC is not coming as a surprise to many industry insiders that have been following trends within the ecosystem since the start of the year. The US SEC has sued a number of crypto firms this year including Kraken exchange. The trading platform was accused of offering its staking product as an unregistered securities but promptly settled with the regulator after paying the sum of $32 million.
Besides the outright crackdowns, the SEC has also issued Wells Notices to entities like Coinbase Global Inc which may also be accompanied by subsequent lawsuits.
With Binance being in the spotlight for now, it remains unclear whether or not the exchange will be exploring settlement or riding the legal path with the commission.
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