In a significant development, the US Securities and Exchange Commission (SEC) has filed a lawsuit against Binance, the world’s largest cryptocurrency exchange, and its CEO Changpeng Zhao (CZ), alleging that several popular cryptocurrencies offered on the platform are unregistered securities.
Notable cryptocurrencies mentioned in the lawsuit include Cardano (ADA), Solana (SOL), and Polygon (MATIC). The seriousness of the situation is further emphasized as the lawsuit identifies Binance’s native token BNB and the BUSD stablecoin as securities.
The lawsuit goes on to list a range of other crypto assets that are allegedly considered securities, such as FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI. Additionally, the SEC points out that Binance has listed tokens that have previously faced enforcement actions by the regulatory body, including AMP, REP, UST, and TRX. This suggests a pattern of potential disregard for securities regulations on the part of Binance.
It is worth noting that Ethereum (ETH) and Litecoin (LTC) are not included in the list of alleged unregistered securities. SEC Chair Gary Gensler has previously indicated that while Bitcoin (BTC) is viewed as a commodity, the majority of existing tokens are considered unregistered securities by the SEC.
The lawsuit specifically accuses Binance of offering unregistered securities trading platforms, engaging in the sale of unregistered crypto asset securities, and maintaining secret control over its US operations to enable high-value US customers to bypass restrictions. It further alleges improper commingling and diversion of billions of dollars in customer funds by Binance.
This legal action by the SEC against Binance and CZ underscores the increasing regulatory scrutiny faced by cryptocurrency exchanges and the need for compliance with securities laws. The outcome of the lawsuit will have significant implications for the crypto industry as a whole and could potentially shape future regulations and practices in the market.
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