The SEC on Monday sued Binance’s U.S. and global entities, alongside its CEO Changpeng CZ Zhao, alleging that they had operated an unregistered securities exchange by allowing people to trade crypto, court filings published late Tuesday show. The U.S. Securities and Exchange Commission (SEC) has been investigating Binance.US since at least 2020, and the regulator has since sought to freeze Binance.US assets.
According to a court filing by SEC lawyer Colby Steele, the agency internally ordered the investigation and designated officials to take testimony on August 17, 2020. The investigation concerned possible violations of the federal securities laws by BAM Trading Services Inc., which does business as Binance.US.
SEC accountant Sachin Verma said BAM Trading had generated $411 million in revenue for a period covering slightly over four years, a period in which he also calculated $225 million in gross profit. In a statement tweeted on Monday, Binance.US said it had engaged with the SEC in good faith for nearly two and a half years, but added that the lawsuit was baseless… unjustified by the facts, by the law, or by the Commission’s own precedent.