The U.S. Securities and Exchange Commission (SEC) wants to freeze the U.S. assets of the world's largest crypto exchange Binance. The authority therefore applied to a U.S. federal court on Tuesday for a temporary injunction. The SEC had sued Binance and its boss Changpeng Zhao on Monday. The authority accuses Binance of operating an unlicensed securities exchange. In addition, Binance misled investors through its market surveillance controls and failed to keep U.S. customers away from its platform.
Other allegations revolve around the manipulation of stock exchange turnover with the help of bogus transactions and the diversion of customer funds. The company has also set up U.S. subsidiaries specifically to circumvent laws. According to industry service CryptoCompare, the exchange, which was founded in 2017, processed $23 trillion in transactions last year. Binance called the allegations unfounded.
"We allege that Zhao and Binance are engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated circumvention of the law," said SEC Chairman Gary Gensler. For example, investors have been misled about risk controls and trading volumes. "The public should be wary of investing their hard-earned assets on or on these unlawful platforms."