A federal judge in the United States has ruled that the majority of lawsuits by the Securities and Exchange Commission (SEC) against Binance and its CEO, Changpeng Zhao, can proceed.
This judgment made by Judge Amy Berman Jackson is an important setback for the leading crypto exchange Binance, which had looked to dismiss the allegations. Binance is accused of several allegations in the lawsuit of SEC initiated in June 2023, which includes artificially inflating trading volumes, mishandling customer funds, and allowing United States customers to trade on its platform in spite of claims to the contrary.
The complaint against Binance by the SEC includes 13 charges alleging that the company operated as an unregistered securities exchange and broker-dealer. According to the lawsuit, the platform misled investors about its trading controls and Changpeng Zhao had significant control over the operations of the exchange in the US in spite of public declaration of its independence.
Binance.US has experienced severe operational challenges in related development, including a drop of 75% in revenue and significant layoffs, as the actions of the Securities and Exchange Commission have severely impacted its business.
The result of the lawsuit could have far-reaching implications for the whole crypto market, particularly regarding the classification of cryptos as securities and the regulatory authority of the Securities and Exchange Commission over digital assets.
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