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The United States Securities and Exchange Commission (SEC) has unsealed documents in its legal case against Binance US, an affiliate of the world’s largest cryptocurrency exchange Binance.
The SEC alleged that the company had “made false and misleading statements in order to entice customers” to open accounts and invest their funds in digital assets.
In a filing dated May 19th, 2021 by the SEC, it highlights the deceptive tactics Binance US allegedly employed to draw in customers. This includes undetailed disclaimers that gave away the main details that potential users would have needed to make informed decisions. Binance US also failed to disclose information about certain activities, such as their operations within a foreign country, the cold wallet storage of funds, and the handling of digital asset transfers, in addition to conflicts of interest, according to the SEC.
Binance US has denied the allegations and responded that they have been engaging constructively with the SEC throughout proceedings.
Adding to challenges facing Binance US, Sarah Examahn, of the New York Stock Exchange (NYSE), has been appointed by the commission as a receiver to freeze the US operations of Binance US. Examahn is tasked with preserving the US assets, business, and records of the exchange.
The legal case between the SEC and Binance US is ongoing, and the documents unsealed by the commission will be used as part of the proceedings.