The US SEC has officially sued Zhao Changpeng, the founder of Coin An, who claimed that this is an attack on the entire industry

Interface News Reporter | Sima Linwei

The cryptocurrency regulatory storm in the United States is still ongoing.

On June 5th, according to official information from the Securities and Exchange Commission (SEC), the SEC officially sued Zhao Changpeng, the founder and CEO of the world's largest cryptocurrency exchange, Coin On, on charges of violating federal securities laws.

Gary Gensler, the chairman of the SEC, confirmed this fact and spoke on social media, stating: "Through 13 charges, we accuse Zhao Changpeng and the Coin An entity of engaging in widespread fraud, conflicts of interest, non disclosure, and deliberate evasion of legal regulation

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

When the news first broke out on social media, Zhao Changpeng, the founder of Coin An, gave a preliminary response: "Our team is on standby to ensure system stability, including withdrawals and deposits. We will respond after seeing the complaint." He commented in a tweet, "This is an attack on the entire industry.

Interface News has contacted the official of Coin Security regarding this news, and there has been no response as of the time of publication.

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 encrypted data analysis data provider Nansen, within an 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.

Before the SEC sued Coin An and Zhao Changpeng, another major regulatory body in the United States, the Commodity Futures Trading Commission (CFTC), had already sued Coin An and its founder Zhao Changpeng in March of this year. This also means that US regulatory agencies have launched a comprehensive crackdown on currency security. However, it is worth noting that both the SEC and CFTC initiated civil lawsuits against Coin An and Zhao Changpeng, rather than criminal lawsuits.

Due to the rise of Coin Security in recent years as the world's largest cryptocurrency trading platform, dozens of countries and regions around the world have regulated and warned Coin Security. Coin Security's compliance investment has also become one of its most important strategic directions. Regarding this regulatory crisis, the currency security side may have already detected it.

On June 5th, according to Bloomberg, insiders revealed that if the founder of Coin An, Zhao Changpeng, resigns due to regulatory difficulties, Richard Teng, who previously worked at the Singapore Monetary Authority, will become a popular candidate to take over as the CEO of Coin An. He joined Coin An in 2021. Insiders say that with the increasing scrutiny of currency security by US regulatory agencies in recent months, the issue of successors has become more urgent. In late May, Zhao Changpeng, the founder of Coin An, appointed Richard Teng as the head of all regional markets outside the United States. Coin security said the news was only "media speculation".

Last week, Coin An also launched an organizational restructuring. Coin An's co founder He Yi recently stated to the public, "Coin An undergoes a small layoff every 3 months and a major layoff every 6 months. The number of people in the bear market has doubled from last year to this year, and there will indeed be some elimination measures." At the time of personnel optimization, Coin An had a total of approximately 8000 people.