“The Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, failure to disclose, and calculated evasion of the law,” SEC Chairman Gary Gensler said in a statement.
Since FTX's crash seven months ago, the SEC has orchestrated a sweeping campaign against the $1 trillion crypto market. But the Binance case represents Gensler's biggest salvo to date, with the agency taking a broad turn against the exchange and its high-profile CEO. At one point in the complaint, the SEC alleges that client money was "at the mercy of Binance and Zhao."
Binance denied the SEC's allegations in a blog post, including the claim that client assets on Binance.US were at risk. The company said it was "disheartened" by the SEC's decision to take the case to court after the two parties had been in talks about a settlement.
"While we take the SEC's allegations seriously, they should not be the subject of SEC enforcement action, let alone in an emergency," the company wrote in the post. "We intend to defend our platform vigorously."
The SEC charges further complicate an already murky outlook for Binance in Washington. US authorities have been kicking around for months, and in March, the Commodity Futures Trading Commission sued Binance for a series of similar charges as a result of the exchange's operations in the US.
