Don't invest your hard-earned money in it! The US government has taken a major action, leading to the prosecution of the former "richest Chinese man"

On June 5 local time, Jin'an, the world's largest cryptocurrency exchange, and its CEO Zhao Changpeng were accused of violating the regulations of the US security.

According to court documents submitted by the US Securities and Exchange Commission (SEC), the SEC accuses Coin An of misleading investors, exaggerating trading volume, transferring customer funds, and evenMixing billions of dollars of Coin An client funds into accounts held by entities controlled by Zhao Changpeng violates US law.

In response, Zhao Changpeng, CEO of Coin An, subsequently stated that the team will ensure the stability of all systems, including withdrawals and deposits. Coin An stated that the SEC's allegations are "baseless" and that Coin An intends to actively defend itself.

After the above news was announced, Bitcoin fell by over $1000 in the short term, breaking the $26000 mark, and the decline expanded to over 7%. As of the close of the 5th, it still fell by nearly 6%. Opening on June 6th, it still fell 2% and was temporarily at $25755.99; The Coin An Coin plummeted by over 7%.

According to public data, including BitcoinThe 24-hour exposure of digital currency reached $448 million (approximately RMB 3.178 billion), with a total of 118029 people exposed.

SECRequest the court to freeze Coin Security assets

Call for 'not to invest your hard-earned money'

According to the Securities Times, on Monday local time, the US Securities and Exchange Commission (SEC) sued the cryptocurrency trading platform Binance and its CEO Zhao Changpeng. The SEC accuses the company of violating investor protection rules, improperly handling customer funds, misleading investors, operating unregistered securities, and other violations. SEC Chairman Gensler stated in a statement that through 13 charges, they accused Zhao Changpeng and the Coin Security entity of participating in a widespread network full of fraud, conflicts of interest, lack of disclosure, and deliberate evasion of laws, allowing Americans to improperly open accounts and trade, and called forThe public should be careful not to invest their hard-earned money in these illegal platforms.The SEC has filed a lawsuit in a federal court in Washington, D.C.

The SEC requires the court to freeze the assets of Coin An and appoint a receiver.This requirement is typically used in situations where the SEC is concerned that company assets may be lost or hidden.

According to Interface News, according to the lawsuit, the SEC believes that Coin An, Coin An America, and Zhao Changpeng provided unregistered securities to the public in the form of BNB tokens and BUSD stable coins linked to Coin An, and also accused Coin An of violating securities laws with its pledge services. BAMTrading (the operating company of Coin America) and Coin itself face similar charges, including failure to register as a clearing house, failure to register as a broker, and failure to register as an exchange. In addition, the SEC also accused Coin An of allowing mixed customer funds, and Zhao Changpeng "secretly" controlled Coin An America. Zhao Changpeng exaggerated the trading volume of Coin An America.

The SEC's indictment states that from June 2018 to July 2021, Coin's revenue was $11.6 billion, most of which came from transaction fees. The SEC believes that since its establishment, the exchange has been under the guidance and control of its founder Zhao Changpeng,At first it was public, but later it was covert to attract American customers.

The lawsuit is clearly well prepared, and the US Securities and Exchange Commission has released a detailed 136 page lawsuit outlining the similarities between the alleged actions of Coin An and its failed competitor FTX. The lawsuit includes testimony from former senior executives of Coin An United States, including two former chief executives, as well as some internal communication records of Coin An.

Zhao Changpeng and Coin An US Response

$231 million outflow from the Coin Security platform

According to Cailian News Agency, Zhao Changpeng stated on Twitter that our team is always ready to ensure the stability of our system, including withdrawals and deposits. Once we receive a lawsuit, we will respond, but we have not yet received any lawsuits. Zhao Changpeng first wrote "4" in this tweet, which is a popular saying in the Coin An community, urging users not to fear or doubt the platform.

Screenshot from Zhao Changpeng's Twitter

Coin Security responded that currently all user assets on Coin Security and its affiliated platforms, including Coin Security America, are secure,Any allegation that there is a risk to user assets on the Coin Security US platform is completely incorrect.

Coin An United States stated that the SEC's allegations are "baseless" and we intend to actively defend ourselves. For the past two and a half years, we have been sincerely cooperating with the SEC in various ways and have had extensive goodwill discussions with the SEC to reach an agreement and resolve their investigation.

Ed Moya, senior market analyst at Oanda, said:I think there is a great risk in this matter, which may cause a serious blow to the currency security

According to interface news, the SEC's accusations against Coin Security have ignited the crypto market. After the news broke out, the price of Bitcoin, the world's largest cryptocurrency by market value, fell by 5.67% in 24 hours, below the $26000 mark. Cryptocurrency stocks such as Coinbase also saw a decline. After the first news of the lawsuit, the stock price fell by nearly 12% from Friday's close, and then narrowed to nearly 10%. According to Nansen, an encrypted data analysis provider,Within one hour after the announcement of the lawsuit, the withdrawal amount recorded by Coin Security was $231 million more than the deposit amount, which does not include the number of Bitcoin transfers.As of now, Nansen's reserve funds for real currency security are approximately $55 billion.

Image source: Visual China

Zhao Changpeng once became one of the world's top ten billionaires

But it was investigated more than once

According to previous reports by Meijing.com, as early as March 27th local time, the US Commodity Futures Trading Commission (CFTC) sued Coin An and its CEO Zhao Changpeng for suspected violations of regulatory measures. It is reported that CFTC filed the above-mentioned lawsuit in the Federal Court of Chicago on March 27th Eastern Time. CFTC stated that Coin An did not register with it, thus evading a series of its obligations.

Bloomberg reported that since at least 2021, the CFTC has been investigating whether Coin Security has failed to prevent the US public from buying and selling cryptocurrencies and their derivatives. According to CFTC rules, if a platform allows the American public to trade a certain derivative, it must be registered with that institution.

After being sued by the CFTC in the United States, Zhao Changpeng posted a one character tweet on his personal social media platform: "4", suspected of citing the fourth clause of his 2023 focused goals and suggestions released at the beginning of the year in response:IgnoreFUD, fakenews, attachments, etc, Ignoring FUD (fear, confusion, doubt) messages, fake news, malicious attacks, etc.

According to public information, Coin On is a global cryptocurrency exchange that provides a trading platform for over 100 cryptocurrencies. In April 2018, the 1.4 million transactions per second trading capacity of Coin An attracted 6 million users, making it the world's largest cryptocurrency exchange. The English name of "Binance" is based on the combination of the word binary and finance, providing more than 150 cryptocurrency transactions, including Bitcoin, Ethereum, Litecoin and its BNB token.

Zhao Changpeng, the founder of Coin An, has already become a well-known figure in the "Coin Circle". Zhao Changpeng was born in Lianyungang, Jiangsu and is a Chinese Canadian entrepreneur. At the end of 2021, against the backdrop of the surge in cryptocurrencies such as Bitcoin,At that time, Zhao Changpeng became the richest Chinese with a fortune of 94.1 billion US dollars (approximately 634.8 billion yuan), and also became one of the top ten billionaires in the world, earning global fame.

Image source: Visual China

In fact, as early as June 2022, the SEC investigated whether Coin On's initial token issuance (ICO) in 2017 involved a violation of securities laws.

edit|Wang Yuelong, Du Hengfeng

Proofreading|Duan Lian

Daily economic news comprehensive source: Securities Times, Interface News, Cailian News, Every Economic Network, and Public Information