Binance Responds As SEC Files Lawsuit Against Binance and CZ

The leading Binance crypto exchange now faces a lawsuit from another US regulator for facilitating trading activities of tokens tagged as securities.

In yet another blow to Binance, the largest crypto exchange, the United States Securities and Exchange Commission (SEC) has filed a lawsuit against the platform and its CEO, Changpeng Zhao. 

The SEC’s lawsuit accuses Binance of facilitating trading activities for popular tokens, such as BNB, BUSD, SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI, which the regulator tagged as securities.

The SEC accused Binance US of providing trading for securities such as BNB, BUSD, SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI. https://t.co/bGOZdbccuh pic.twitter.com/3pzzjAo9xl

— Wu Blockchain (@WuBlockchain) June 5, 2023

It is worth noting that the SEC’s list of tokens classified as securities is not exhaustive. The agency explicitly stated that the mentioned tokens are “including but not limited to.”

Interestingly, the SEC’s accusations did not include tokens with significant trading volumes like ETH, USDC, USDT, and LTC. The SEC Chairman had previously acknowledged that cryptocurrencies other than Bitcoin could possess securities attributes, as reported by The Crypto Basic.

The regulatory agency also alleges that Binance offered coin-earning programs like BNB Vault and Simple Earn, as well as a staking investment plan. The developments have fueled widespread speculation about the future of the exchange and its leadership.

Binance CEO Reacts

The CEO of Binance, Changpeng Zhao, has taken to Twitter to respond to the SEC’s lawsuit, assuring users that the team is actively monitoring and maintaining the platform’s stability, including withdrawal and deposit functionalities. 

“Our team is all standing by, ensuring systems are stable, including withdrawals and deposits,” Zhao noted

4.

Our team is all standing by, ensuring systems are stable, including withdrawals, and deposits.

We will issue a response once we see the complaint. Haven’t seen it yet. Media gets the info before we do.

🙏

— CZ 🔶 Binance (@cz_binance) June 5, 2023

The CEO mentioned that Binance would issue a comprehensive response once it has reviewed the complaint filed by the SEC, noting that the media often obtained such information before it.

Binance Responds

Binance, in their official Blog, expresses disappointment with SEC’s complaint. Binance says we cooperated, answered questions, and engaged in good-faith discussions for a settlement and to resolve their probes. However, SEC chose to litigate unilaterally, abandoning the negotiation process. Binance says this choice disheartens them.

Binance suggests SEC’s goal wasn’t investor protection but to make headlines. Binance says it will cooperate with regulators and defend technology against lawsuits as its priority remains to provide a safe platform and promote financial freedom.

Notably, this suit against Binance came after the US Commodity Futures Trading Commission (CFTC) initiated legal action against Binance for allegedly violating US derivatives rules, as reported by The Crypto Basic.

Binance, which has grown to become one of the largest and most influential cryptocurrency exchanges, now finds itself entangled in multiple legal battles with US regulatory authorities.

These actions underscore the increasing scrutiny the crypto industry faces as regulators seek to establish more straightforward guidelines and protect investors.

BNB is down 8.58%, trading at $280 after the news.