- The US district court issued a summons for Binance CEO Changpeng Zhao following a lawsuit by the SEC accusing the exchange of alleged unregistered securities operations.
- The SEC lawsuit against Binance listed 13 charges, most of which pertained to claims of unregistered sales of internal products and services.
In a momentous development in the cryptocurrency world, Changpeng Zhao, the CEO of Binance, one of the leading global cryptocurrency exchanges, has been summoned by a US district court. The summons was issued on June 7, a mere two days following the Securities and Exchange Commission’s (SEC) formal lawsuit against the exchange for supposedly conducting unregistered securities operations.
The summons, while briefly stating,
“A lawsuit has been filed against you,”
does not reveal many details regarding the allegations. Neither the SEC nor Binance immediately returned a request for more information about the summons, which, upon inspection by Cointelegraph, had not been marked as served yet.
While this summons does not necessarily entail a personal appearance from Zhao, he is legally mandated to respond once it has been served. The document indicates that upon service, both Binance and its CEO will have a window of 21 days to issue a response. A failure to respond may result in a default judgement against them for the relief requested in the complaint.
This lawsuit by the SEC against Binance, unveiled on June 5, lodges 13 charges against the cryptocurrency exchange. These primarily revolve around accusations of unregistered sales of its internal products and services, the company’s cryptocurrency staking program, and an alleged failure to duly register its primary and US arms as exchanges.
Binance, however, contests the SEC’s allegations, emphasizing its distinction from previous exchange failures, such as the FTX collapse. In response to the SEC action, Binance stated,
“We are different than ___,”
suggesting its business model is not analogous to those of other exchanges.
Cointelegraph reports that Binance has flatly denied any misuse of its exchange platform, dismissing accusations that it “siphoned consumers’ funds” or “collateralized borrowings.” The exchange also refutes claims of having made “large donations” to political candidates or “large sponsorships” to entities within the entertainment and media sectors.
