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The Binance Capital has been in the news for the last two days. As per the latest headlines, the CEO of the world’s largest crypto platform Changpeng Zhao saw a decrease in his wealth. Zhao’s wealth fell to $26 Billion, according to the Bloomberg Billionaire Index, nearly decreasing by 5%. This was the result of the recent lawsuit filed against his company Binance by the SEC over its illegal operationality.
Earlier this year, Zhao’s wealth had surged to 117% and had hit a high of $96.9 billion. Coming to the lawsuit filed, on Monday, the U.S. Securities and Exchange Commission (SEC) accused Binance and its CEO, Changpeng Zhao, of running a "web of deception" that includes inflating its trading volume artificially and transferring customer money. For those who don't know, the SEC is a separate federal agency of the United States whose main duty is to uphold the law against market manipulation.
The agency filed a lawsuit against Binance and Zhao for running an unregistered securities exchange, failing to bar U.S. clients from using its platform, and deceiving investors about its market surveillance procedures.
In its lawsuit, which was filed in federal court in Washington, D.C, the SEC also alleged, according to a Reuters report, that Binance and Zhao secretly controlled customer assets, allowing them to combine and divert customer funds, and that Binance established various U.S. entities as part of a sophisticated scheme to evade U.S. federal securities laws.
Binance's CEO Zhao stated in a tweet that the exchange will respond after reviewing the SEC's complaint and that its staff is "standing by, ensuring systems are stable, including withdrawals and deposits."
The value of BNB, the fourth-largest cryptocurrency in the world by market cap, has dropped by about 9% during the last several days. And this is not the first trouble that the company is facing. Well, after the lawsuit it is to see how the company takes the further steps to make ends meet.
- Charu Kapoor
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