May 20, 2024
Policy & Regulation

Binance CEO Changpeng Zhao Summoned by US District Court Following SEC Lawsuit

Changpeng Zhao, CEO of Binance, was summoned by the United States district court in Washington, DC, on Wednesday, June 7, shortly after the Securities and Exchange Commission (SEC) officially filed a lawsuit against the exchange for alleged unregistered securities activities.

The summons stated, “A lawsuit has been filed against you.” Although there is limited information available at this time, the summons does not appear to have been marked as served. Attempts to obtain immediate information from the SEC or Binance have not been successful. Once served, Zhao is obligated by law to respond to the summons.

According to the document, Binance and its CEO will have 21 days to respond once they have been served. The document warns, “If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint.”

The SEC’s lawsuit against Binance, which became public on June 5, accuses the cryptocurrency exchange of 13 charges, primarily related to the alleged unregistered sale of internal products and services, the cryptocurrency staking program, and the failure to properly register its primary and US branches as exchanges. Binance refutes these allegations and, in response to the SEC’s action, stated, “We are different than ___,” indicating that its business model is not comparable to previous exchange failures like the FTX collapse.

Furthermore, Binance denies any involvement in “siphoning consumers’ funds” or engaging in “collateralized borrowings.” The company also asserts that it has not made “large donations” to political candidates or provided “large sponsorships” to entertainment and media entities.

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