SEC Alleges Binance.US Inflated Trading Volumes through “Wash Trading”
The US Securities and Exchange Commission (SEC) has accused Binance.US of engaging in “wash trading” by inflating its trading volumes. The SEC alleges that Binance.US used user accounts held by Sigma Chain, a Swiss trading company controlled by CEO Changpeng Zhao, to artificially boost its trading volumes. This comes after the SEC sued Binance, Binance.US, and CZ for alleged improper actions. The Wall Street Journal reports that the SEC claims over 70% of trading volume on crypto exchanges is derived from wash trading.
Binance.US Counters SEC’s Claims
Binance.US has filed a lawsuit against the SEC, accusing them of misleading the public with their claims. They argue that the allegations of wash trading are “entirely unfounded” and based on a misunderstanding of the facts and relevant law. The SEC had also accused Binance and CZ of commingling customer assets, which Binance.US denies.
Pressure Mounts on Binance.US
Binance.US has been facing increasing regulatory pressure from the SEC, leading to layoffs within the company. They are now seeking the dismissal of a Commodity Futures Trading Commission (CFTC) complaint that accuses them of violating the Commodity Exchange Act and federal regulations. Binance has until July 27 to respond to the CFTC’s complaint.
Hot Take: Binance.US Faces Mounting Legal Challenges
Binance.US is finding itself in the crosshairs of regulatory authorities, with both the SEC and CFTC accusing them of improper actions. The allegations of wash trading and commingling of customer assets could have serious implications for the exchange. Binance.US will need to provide a strong defense to counter these claims and navigate the legal challenges ahead.
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