SEC believes Binance and ex-CEO Changpeng Zhao crimes were similar to fraud witnessed in FTX
●The Wall Street Journal reports that US SEC wants to prove Binance and founder Changpeng Zhao committed an FTX-style fraud.
●The financial regulator keeps pressing for evidence of potential fraud at Binance.US.
●Specifically, the regulator alleges that Binance and CZ may have a backdoor to control assets stored on the Binance.US platform.
●Meanwhile, the US DoJ has denied CZ from leaving the US before sentencing.
Binance and its founder CZ committed FTX-style fraud, according to the US SEC, which alleges that they may have a backdoor to control assets stored on the Binance.US platform, just like FTX and Sam Bankman-Fried did with Alameda Research.
Based on a report in the Wall Street Journal, the SEC is still looking for evidence to prove that Binance and CZ may have a backdoor to control assets stored on the Binance.US platform. The financial regulator started pursuing Binance and Binance.US in June on allegations that they operated illegal securities exchanges.
The lawsuit filed by the companies also depended on the financial regulator’s concerns about the potential for Binance to expropriate the American crypto assets in an FTX-style fraud. However, community members defend that Binance did not cause harm to retail investors like FTX did.
It all comes after CZ capitulated to the US SEC last week, pleading guilty to the levied charges including money laundering and breaking sanction laws. In the latest, the US DoJ has denied CZ from leaving the US before sentencing.
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