U.S. Securities and Exchange Commission are reportedly looking at Binance U.S.’s U.S. branch over trading companies with connections to Changpeng Zhao, Binance CEO. SEC Chairman Gary Gensler emphasizes the need for “basic investor protection” in the crypto space.
SEC probes Binance, US
The U.S. Securities and Exchange Commission, (SEC), is investigating the U.S. branch of cryptocurrency exchange Binance US (Binance US).
According to Wall Street Journal, Tuesday’s Wall Street Journal report that the securities watchdog examines the relationships between Binance US (CZ) and two trading companies with connections to Changpeng Zhao (CZ), citing sources familiar with the matter.
Merit Peak Ltd. and Sigma Chain AG are the two listed firms. They are market makers and allow traders to trade crypto on Binance US.
The SEC however alleges Binance US failed to disclose to its customers any links between the exchanges and the trading firms. These people claim that Binance US also asked for information on the companies owned by Binance US.
On Wednesday, Fox Business interviewed SEC Chairman Gary Gensler about the Binance US news and the SEC’s efforts to regulate the crypto space. While the SEC chief did not specifically comment on the Binance US probe, he cited “basic investor protection” as the key driver for all SEC actions.
Chair Gensler detailed:
The vast majority of activity in this asset category, approximately $2 trillion, takes place on centralized exchanges and lending platforms.
He then spoke about the enforcement proceedings against Blockfi cryptocurrency lender. To settle the charges against Blockfi and other state regulators, the company agreed to pay $100 Million.
Gensler emphasized the importance of ensuring “basic investor protection — protection against fraud and manipulation.” He reiterated that many of the tokens on crypto exchange platforms may be securities.
How do you feel about Binance US being questioned by the SEC? Comment below.
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