Bitcoin’s value experienced a significant downturn as the world’s preeminent cryptocurrency exchange, Binance, along with its CEO, Changpeng Zhao, was embroiled in allegations of a “deceptive network” by US regulatory bodies.
The leading cryptocurrency token witnessed a fall exceeding 3%, dropping below £21,000, in light of accusations against Binance and Zhao for misappropriation of investor capital, operating an unregistered exchange, and infringing various US securities laws.
The legal complaint filed by the SEC encompasses thirteen charges against the digital asset trading platform – notably, the commingling and redirection of client assets to a company owned by Zhao known as Sigma Chain.
These allegations mirror those levelled at the second-largest cryptocurrency exchange, FTX, and its founder, Sam Bankman-Fried, following its downfall last year.
Gary Gensler, the SEC chairman, stated in writing that Zhao and Binance “were involved in an intricate deceptive scheme, conflicts of interest, non-disclosure, and a deliberate evasion of the law.”
He further warned, “The public should exercise caution when investing their hard-earned assets with or on these illegal platforms.”
In response to the allegations, Binance, through a social media update, stated that it has been collaborating with the SEC’s inquiry but argued that the commission “decided to unilaterally take action and litigate.”
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