Zhao Changpeng, founder of Coin An, has been charged by the SEC with 13 counts of fraud and conflict of interest

Lei Diwang Lotte June 6th

The cryptocurrency sector, where the turmoil has slightly calmed down, has seen another surge in recent times.

Recently, the US Securities and Exchange Commission (SEC) has taken action against cryptocurrency giant Binance, which may violate its US business laws. Regulatory authorities have filed 13 charges against the founder of Qian An and Zhao Changpeng, accusing them of violating securities laws.

The official claim is that Coin An deliberately violated its own international compliance controls to help US investors continue trading on Binance. com, which should have relied on a separate Binance. US system. The US Securities and Exchange Commission stated that Zhao and his company are also "behind the scenes" controlling Binance. US.

The SEC accuses Zhao Changpeng and Coin An of controlling the assets of platform customers, allowing them to freely mix or transfer customer assets, including to an entity owned and controlled by Zhao called SigmaChain. The SEC complaint further accuses BAMTrading and BAMManagementUSHoldings, Inc. of misleading investors about the non-existent trading controls on the Binance. US platform, while SigmaChain is involved in manipulating transactions, artificially creating the illusion of huge transaction volume and driving up the price of cryptocurrencies. The lawsuit states that the defendant concealed the fact that they mixed up billions of dollars in investor assets and sent them to a third party, MeritPeakLimited, which is also owned by Zhao.

SEC Chairman Gary Gensler said, "Through 13 charges, we accuse Zhao and Binance entities of engaging in extensive fraud, conflicts of interest, lack of disclosure, and intentional evasion of the law network

Zhao and Coin An misled investors in their risk control and trading volume, while actively concealing the manipulation of trading by platform operators and their affiliated market makers, and even concealing the custody locations and custodians of investors' funds and encrypted assets. They attempted to evade US securities laws by declaring false controls they ignored behind the scenes, so that they could keep high-value US clients on their platforms. The public should be cautious of leaving them on their platforms The hard-earned assets are invested in or on these illegal platforms

Zhao and Binance entities not only know the rules, but also intentionally choose to avoid them, putting their clients and investors at risk - all in order to maximize their profits, "said Grewal, director of law enforcement at Gurbir S. SEC, By conducting multiple unregistered issuances without registration, combined with the functions of exchanges, brokers, traders, and clearing houses, Zhao's controlled Binance platform has brought huge risks and conflicts of interest to investors. These risks and conflicts can only be exacerbated by the lack of transparency on the platform, reliance on related party transactions, and lying to prevent trading manipulation. Despite their efforts over the years not to be held accountable Ren, but today's complaint started the process of doing so

The SEC filed a lawsuit with the District Court for the District of Columbia in the United States, stating that since at least July 2017, Binance.com and Binance.US, although controlled by Zhao, operate as exchanges, brokers, traders, and clearing houses, and, among other things, earn at least $11.6 billion in revenue from transaction fees from US clients.

Coin An expressed "frustration" at these accusations and insisted that he had participated in "good faith" negotiations to reach a settlement.

In the statement, Qian An stated, "From the beginning, we have actively cooperated with the investigation of the United States Securities and Exchange Commission, striving to answer their questions and address their concerns. Recently, we have had extensive goodwill discussions to reach a negotiated solution and resolve their investigation. Despite our efforts, the SEC has chosen to take unilateral action and file a lawsuit. We are discouraged by this choice

Zhao Changpeng is a Chinese American born in 1977 in Lianyungang, Jiangsu. At the age of 12, his family moved to Vancouver, Canada. His mother is a teacher, and his father is a scholar at the University of British Columbia. In 2017, Zhao Changpeng established Coin An, officially establishing his own portal in the cryptocurrency industry; Since the FTX crash in 2022, Coin An's position in the cryptocurrency industry has become more stable, with Zhao Changpeng once known as the richest Chinese.

The action against Coin Security is the latest stage in a broader crackdown on the encryption industry.

FTX and former CEO Sam Bankman Fried face multiple charges of fraud and bribery. The state of New York has sued Alex Mashinsky, former CEO of Celsius, on suspicion of fraud, while the US Securities and Exchange Commission has accused TerraformLabs of engaging in "billions of dollars" of fraudulent activities.

In addition to the efforts of the US Congress to formulate cryptocurrency policies, cryptocurrency exchanges are facing tremendous pressure to change their practices.

Lei Di was founded by media person Lei Jianping. If reprinted, please specify the source.