US watchdog sues crypto exchange Finance and founder

Crypto exchange Finance and founder Changpeng Zhao have been sued by the US Securities and Exchange Commission (SEC). They allegedly mishandled customer deposits, misled investors and regulators and violated securities laws. SEC Chairman Gary Gensler argues that consumers should not put their “hard-earned assets” into “these fraudulent sites.”

Finance called the fee disappointing in a response. The crypto exchange says it has been in long talks with the SEC to resolve the matter. Binance also says he will defend himself in court. Binance is not a publicly traded company. The crypto exchange does not have an official headquarters, but falls under the rules in Bermuda.

Binance has been banned in the US since 2019. After that, the company established a subsidiary, Binance.US, which complies with all the rules, but it too has already been banned in six states. Now the authorities are behind it because Binance.US is not actually separated from the parent company.

In the Netherlands, Binance was fined 3.3 million euros by De Nederlandsche Bank (DNB) last year. The regulator said the crypto exchange offered its services without legally registering with the central bank.

Cryptocurrencies fell significantly after the news of the US indictment. Bitcoin, for example, was 6.3 percent lower at just over $25,500. Other cryptocurrencies lost almost 10 percent of their value.