SEC launched an investigation into Binance.US’s ties to trading companies

The regulator is investigating the involvement of the platform’s CEO Changpeng Zhao in two market maker organizations

16.02.2022 - 13:45

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What’s new? The US Securities and Exchange Commission (SEC) has launched an investigation into the activities of the US unit of the Binance cryptocurrency exchange. The Wall Street Journal news outlet reported that 2019 corporate documents, as well as former employees, link the platform’s CEO Changpeng Zhao to Sigma Chain AG and Merit Peak. Both organizations act as market makers and constantly buy and sell cryptocurrency on Binance.US, which reduces price volatility.

Information on the Wall Street Journal website

What does the Binance website say? The exchange’s website states that the companies associated with it can carry out operations on the trading platform, but the organizations’ name is not specified. According to an unnamed representative of Binance US, the exchange cannot disclose information about investors and corporate culture but can provide this data at the request of regulators.

What had happened before? In May 2021, Binance was under investigation by both the Department of Justice and the Internal Revenue Service in an attempt to stop the use of cryptocurrencies for illegal transactions by US residents. In this, Changpeng Zhao was denying any allegations of misconduct on the exchange.

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