The US has charged cryptocurrency exchange Binance with operating a “web of deception.”
Binance has been accused of operating a “web of deception” after being slammed with yet another court suit by US financial regulators.
The Securities and Exchange Commission (SEC) stated that the trading platform violated standards intended to protect investors in order to continue operating in the United States.
The company is also accused of misusing customer funds.
Binance stated that it will “vigorously” protect the platform.
“While we take the SEC’s allegations seriously, they should not be the subject of an SEC enforcement action,” the company stated, adding that it was in talks with the agency.
According to the lawsuit, authorities’ “misguided and conscious refusal to provide much-needed clarity and guidance to the digital asset industry” is an example of their “misguided and conscious refusal.”
It comes as US regulators step up their inspection of the crypto business, promising to use existing laws to weed out fraud and other concerns, a task that became more pressing following the catastrophic collapse of Binance rival FTX last year.
Another US financial authority, the Commodity Futures Trading Commission, filed its own case against Binance in March, accusing it of operating illegally in the country.
Binance has been charged of violating US financial laws.
The crypto-giant FTX has declared bankruptcy.
The SEC stated in its filing on Monday that Binance and its founder, Changpeng Zhao, had demonstrated “blatant disregard of federal securities laws and the investor and market protections these laws provide” in order to benefit themselves.
It claimed that the company, which operates in 100 countries and is the world’s largest crypto trading platform, unlawfully solicited investors and customers, misrepresented the degree of trading on the platform, and misrepresented its oversight and risk precautions, allowing it to earn at least $11.6 billion in revenue from US customers between June 2018 and July 2021.
“We allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law,” SEC Chair Gary Gensler said in a statement announcing the case.
“The general public should exercise caution before investing any of their hard-earned assets with or on these illegal platforms,” he added.
The legal battle caused the price of Bitcoin, the most well-known crypto currency, to fall by 5%.