Core Evidence of the US SEC: Zhao Changpeng Manipulates Coin Security Transactions and Misuses Customer Funds

The regulatory storm in the currency circle has become increasingly fierce, and the US SEC has frozen its US platform assets after suing Coin Security. The core evidence in the SEC allegations is manipulation of transactions and misuse of customer funds.

The SEC highlighted concerns about customer funds in Monday's allegations. Specifically:

SigmaChain, registered in Switzerland, received customer funds from Coin An and then participated in "manipulation trading", artificially increasing the trading volume of the exchange.
MeritPeak, headquartered in the British Virgin Islands, uses billions of dollars in Coin An customer funds to purchase the stable currency BUSD linked to the US dollar.
These two companies allow Coin An to mix company funds with customer assets and use these funds freely.This puts customers' assets at risk, while Coin An seeks to "maximize" its profits.

Although there was no detailed explanation of the final destination of the funds received by MeritPeak and SigmaChain, the SEC provided a few specific examples of their use:

SigmaChain spent $11 million on a yacht after receiving $145 million from Binance. US operators before 2021.
During the period from October 2022 to January 2023, Zhao Changpeng obtained $62.5 million in his personal name from a bank account in Coin An. Zhao Changpeng also used MeritPeak to provide over $16 million in funding for Binance. US.

In response, John ReedStark, former director of the SEC Internet Enforcement Office, stated:

Due to the lack of any regulatory oversight of relevant parties, the SEC places particular emphasis on the risk of customer funds. Your assets can be transferred in any shell game that Coin An likes, and whenever everything crashes, you will be the last one.

Coin An stated that the security of user assets will actively defend the SEC's allegations. It is worth mentioning that Coin An has been "encircled" by multiple regulatory agencies. In March, Coin An was sued by the US Commodity Futures Trading Commission (CFTC) for suspected violations of trading and derivatives rules, and was also investigated by the US Department of Justice for suspected money laundering and sanctions violations.