In a recent turn of events, the US Securities and Exchange Commission (SEC) has filed a lawsuit against the popular cryptocurrency exchange Binance, its counterpart Binance.US, and their CEO Changpeng “CZ” Zhao. The SEC has now requested federal court permission for unconventional methods to serve legal papers, citing the secretive nature of both the exchange’s and CZ’s locations.
The SEC hopes to receive permission from the District Court for the District of Columbia to use alternative means for delivering legal papers to Binance and CZ. The attempts to locate and serve papers to the crypto giant and its CEO have been largely unsuccessful due to CZ’s protective nature concerning the disclosure of his whereabouts. The SEC has accused Binance and CZ of violating securities laws, committing fraud, and failing to prevent US customers from using the exchange platform.
The challenge to serve papers is exacerbated by Binance’s lack of an official headquarters and CZ’s evasive nature when it comes to revealing his location. Born in China and a Canadian citizen, CZ is believed to be residing in Dubai. Summons have been sent to CZ in Malta for a civil action, but he is not required to appear in person and can respond within the specified timeframe. The SEC is reportedly well-informed of CZ’s location as they have communicated with his lawyers.
The situation further complicates as Binance.US suspends USD deposits and withdraws from partnerships with banks. An email shared by Binance.US reveals hesitation from banking and payment partners to cooperate with the exchange due to potential regulatory action against cryptocurrencies. This suspension aims to protect customers from stringent regulations.
In response to Binance.US’s actions, the SEC has filed an emergency action for a temporary restraining order. With an intention to preserve customer funds, this move has prompted criticism from cryptocurrency investors.
While many view the SEC’s investigation of Binance and its CEO as an essential step towards achieving transparency and compliance in the cryptocurrency industry, others see it as an unwarranted invasion of privacy that could negatively impact the growth of digital assets. As regulatory scrutiny and debates around cryptocurrencies continue to unfold, the outcomes of these matters will have far-reaching implications on the future of the industry and its participants.
Source: Coingape
