The United States Securities and Exchange Commission (SEC) has filed a lawsuit against Binance, the world's largest cryptocurrency exchange. According to the SEC, Binance operated an illegal trading platform within the United States and misused customer's funds. Changpeng Zhao, the founder, and controlling shareholder of Binance, has also been named as a defendant in the lawsuit.
The SEC alleges that Binance and Zhao diverted customer's funds to a trading entity controlled by Zhao, which engaged in fraudulent trading activities. According to the SEC, that trading company, Sigma Chain, engaged in dishonest trading that caused Binance's volume to appear to be higher than it actually was.
Sigma Chain is a trading entity that has been mentioned in the lawsuit filed by the Securities and Exchange Commission (SEC) against Binance and its founder, Changpeng Zhao. These activities were aimed at artificially inflating Binance's trading volume, giving the impression that the exchange's operations were larger than they actually were.
The SEC's lawsuit suggests that Sigma Chain's involvement played a role in the alleged misuse of customers' funds by Binance and Zhao.
Binance is a prominent cryptocurrency exchange. It has risen to become the largest exchange globally in terms of trading volume. Binance provides a platform for users to buy, sell, and trade a wide range of cryptocurrencies.
Binance has expanded its services to include features like spot trading, futures trading, lending, and staking. Additionally, Binance has its own native cryptocurrency, Binance Coin (BNB), which can be used for discounted trading fees and other ecosystem-related activities. The exchange operates globally, catering to users from various countries.
While, cryptocurrency exchanges in the United States provide regulated platforms for users to buy, sell, and trade digital assets. Popular exchanges such as Coinbase, Kraken, Gemini, and Bittrex operate within the US and comply with regulatory requirements set by agencies like the SEC and FinCEN.
These exchanges offer a range of trading pairs, including major cryptocurrencies like Bitcoin and Ethereum. They prioritize security measures, such as multi-factor authentication and cold storage, to safeguard user funds. US crypto exchanges also provide customer support and additional services such as wallet storage and institutional trading options, contributing to the growth and adoption of cryptocurrencies in the country.
This legal action by the SEC signifies an escalation in the regulatory scrutiny faced by cryptocurrency exchanges. Binance's position as the largest exchange by trading volume amplifies the potential impact of this lawsuit on the entire industry. The SEC, responsible for enforcing securities laws in the United States, aims to protect investors and maintain fair markets.