The Securities and Exchange Commission (SEC) has taken decisive action against Binance Holdings Ltd. (Binance), its U.S.-based affiliate BAM Trading Services Inc. (BAM Trading), and Changpeng Zhao, the renowned founder of Binance. In a comprehensive legal move, the SEC has filed a total of 13 charges against them, alleging multiple violations of securities laws that have rocked the cryptocurrency industry.

The charges leveled by the SEC encompass a wide range of allegations that shed light on the alleged misconduct of Binance and its entities. One of the central claims made by the SEC is that Binance and Zhao publicly declared that U.S. customers were barred from trading on the Binance.com platform. However, the SEC argues that behind the scenes, Binance and Zhao surreptitiously bypassed their own controls to allow high-value U.S. customers to continue trading on the platform, contradicting their public statements. Furthermore, the SEC asserts that despite Binance's portrayal of Binance.US as an independent platform for U.S. investors, Zhao and Binance maintained significant control over its operations, covertly pulling the strings.

A critical facet of the SEC's allegations revolves around the management of customer assets. According to the SEC, Binance and Zhao allegedly wielded undue control over the assets entrusted to them by customers, enabling the commingling and diversion of these assets at their discretion. This included the transfer of customer assets to Sigma Chain, an entity controlled by Zhao. The SEC also contends that BAM Trading and BAM Management US Holdings Inc. deceived investors regarding the presence and efficacy of trading controls on the Binance.US platform. The SEC's complaint further asserts that Sigma Chain engaged in manipulative trading, artificially inflating the trading volume on the platform.

In addition to these allegations, the SEC has filed charges related to the registration status of the Binance entities. The SEC argues that Binance and BAM Trading operated as unregistered national securities exchanges, broker-dealers, and clearing agencies. According to the SEC, Binance should have obtained registration as an exchange, broker-dealer, and clearing agency for Binance.com, while Binance and BAM Trading should have sought registration as an exchange and clearing agency for Binance.US. Furthermore, the SEC asserts that BAM Trading should have obtained registration as a broker-dealer. Zhao, as the founder and leader of Binance and BAM Trading, is held liable as a control person for the alleged registration violations.

The SEC has also targeted Binance for the unregistered offer and sale of its own crypto assets, including the BNB token, Binance USD (BUSD), and specific crypto-lending products. BAM Trading, on the other hand, has been charged with the unregistered offer and sale of Binance.US' staking-as-a-service program. The SEC's complaint highlights that Binance exerted secretive control over assets staked by U.S. customers in BAM's staking program.

The SEC's complaint portrays a pervasive pattern of deception, conflicts of interest, lack of disclosure, and a calculated effort to evade securities laws. SEC Chair Gary Gensler emphasized the extensive web of deception allegedly woven by Zhao and the Binance entities, underscoring the need for heightened caution among investors. Gensler warned the public to exercise vigilance and refrain from entrusting their hard-earned assets to these platforms, which the SEC considers unlawful.

The SEC's investigation into the violations related to the Binance.US platform was conducted by a team supervised by Kathleen Hitchins, Ann Rosenfield, and Colby Steele. Meanwhile, the investigation into the violations concerning the Binance.com platform was conducted under the supervision of Michael Baker, Donna K. Norman, and Martin Zerwitz. The litigation will be spearheaded by Matthew Scarlato, Jennifer Farer, and J. Emmett Murphy, with the valuable support of a team of legal professionals.

Given the gravity of the charges brought forth by the SEC, investors are strongly advised to exercise utmost caution and diligently assess the associated risks before engaging with Binance and its platforms.

Link to the announcement: https://www.sec.gov/news/press-release/2023-101

On the right side or at the bottom, you'll find a PDF file of official complaint.

Interesting point: page 29

111. As Binance’s CCO bluntly admitted to another Binance compliance officer in December 2018, “we are operating as a fking unlicensed securities exchange in the USA bro.” (Emphasis added.)

The securities mentioned in the file:

• BNB
• BUSD
• SOL
• ADA
• MATIC
• FIL
• ATOM
• SAND
• MANA
• ALGO
• AXS
• COTI

Do you hodl any of them? What's your plan? Do you expect more coins to be named in the future?