“Binance Facing US Charges Over ‘Web of Deception'”

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On 5 June 2023, the US financial regulator, Securities and Exchange Commission (SEC), accused crypto giant Binance of engaging in a “web of deception” after filing a lawsuit against them. The SEC claimed Binance had ignored rules to protect investors and improperly used customer funds.

In response, Binance said they would defend their platform “vigorously” and argued the lawsuit was an example of the regulator’s “misguided and conscious refusal to provide much-needed clarity and guidance to the digital asset industry”.

The US authorities are increasing their scrutiny of the crypto industry, vowing to use existing laws to tackle fraud and other issues. The Commodity Futures Trading Commission (CFTC) also filed a lawsuit against Binance in March, accusing them of operating illegally in the US.

In Monday’s filing, the SEC outlined how Binance and its founder Changpeng Zhao had allegedly shown “blatant disregard of the federal securities laws and the investor and market protections these laws provide” in order to make a profit.

The SEC said Binance had unlawfully solicited investors and customers, mispresented its oversight and risk precautions, and earned at least $11.6bn in revenue from US customers between June 2018 and July 2021.

SEC Chair Gary Gensler warned the public should be wary of investing in these “unlawful platforms”. This legal fight caused the price of Bitcoin to drop 5%.

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