The SEC accuses Binance of mishandling customer funds and lying to regulators

The US Securities and Exchange Commission (SEC) has accused Binance, the world’s largest cryptocurrency exchange, of mishandling customer funds and lying to US regulators and investors. According to the SEC’s 136-page complaint, company mixed billions of dollars in customer funds and sent them to a separate company, Merit Peak Limited, which is controlled by Binance’s founder, Changpeng Zhao.

The SEC alleges that Binance operated as an unregistered securities exchange, and illegally offered and sold securities. By doing this the company broke the US securities laws. The exchange has also been accused of misleading investors about the adequacy of its systems to detect and control manipulative trading. The SEC’s lawsuit is the second time this year that federal regulators have accused the Binance of evading laws designed to protect investors in the USA.

The worlds largest cryptocurrency exchange has long been seen as a major target in the SEC’s quest to tighten the crypto industry regulation, and by extension, the US financial system response toward the cryptocurrency investments. By the report from Binance, company is making $65 billion in average daily trading volume, and thus the SEC’s allegations have sent shockwaves throughout the cryptocurrency industry. According to the Financial Times, the Binance said it was ‘disappointed’ by the SEC’s actions. ‘We look forward to working with them in good faith and in a constructive manner to resolve the issues they have identified,’ the company said.