WSJ: SEC seeks evidence of fraud on Binance.US

What’s new? The US Securities and Exchange Commission (SEC) is actively looking for evidence of fraud on the Binance.US platform, WSJ journalists report. In particular, officials are interested in the potential presence of a backdoor that would allow the global platform and its founder Changpeng Zhao to control the assets of clients of the American division.

WSJ’s material

What else is known? The SEC filed a lawsuit against both platforms and Zhao in June of this year, accusing them of running an illegal securities exchange. In the document, the agency raised concerns about Binance’s potential ability to steal the assets of local clients. In this regard, officials even demanded the freezing of Binance.US assets, but later reached an agreement with the company. Within its framework, the US assets of the exchange were not frozen on the condition that employees of the global platform would not have access to them.

Earlier this month, Binance settled the claims of the US Department of Justice on charges of violating sanctions and anti-money laundering rules. The platform pledged to pay a $4,3 billion fine and appointed a new CEO to replace Zhao. The businessman himself will face a trial next February, which could result in an 18-month prison sentence. The court is still deciding whether Zhao should be barred from leaving the States to prevent escape.

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The new CEO of Binance, Richard Teng, emphasized that the accusations against the exchange did not concern the security of client assets, which continues to be provided at a high level.

Earlier, an asset theft backdoor was discovered on Sam Bankman-Fried’s FTX crypto exchange, whose bankruptcy last November caused $8 billion in damages to customers. The FTX founder’s sentencing will be announced in March next year, with the charges combined, the maximum penalty could exceed 100 years in prison.

Following the events with FTX, US Senator Ted Budd introduced a bill that, if passed, would prevent federal agencies from imposing regulations prohibiting the use of non-custodial wallets. The initiative is aimed at enabling the self-storage of cryptocurrencies by retail investors.