Binance to ‘vigorously’ defend platform against US lawsuit

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Binance said it will “vigorously” defend its business against a lawsuit filed yesterday by the US Securities and Exchange Commission (SEC) against the company and its CEO Changpeng Zhao.

The lawsuit charges Binance and Zhao with 13 offenses, including the unregistered offer and sale of the firm’s own crypto assets such as BNB and BUSD.

In its response to the SEC, the crypto exchange said that user assets on Binance.US are secure and that the agency’s actions are “limited in reach” because Binance is not based in the US.

The firm also accused the SEC of regulating by “enforcement and litigation” rather than providing clarity and guidance to the crypto industry.

The SEC alleges that Binance and Zhao commingled customer funds with their own and diverted them to third parties such as Merit Peak and Sigma Chain, which are owned by Zhao.

“We allege that Zhao and the Binance entities not only knew the rules of the road, but they also consciously chose to evade them and put their customers and investors at risk – all in an effort to maximize their own profits,” said Gurbir Grewal, director of the SEC’s division of enforcement.

Binance said that any claims that user assets on its US platform have ever been put to risk “are simply wrong,” adding that there is “zero justification” for the SEC to file a lawsuit “in light of the ample time the [SEC] staff has had to conduct their investigation.”

Earlier this year, the US Commodity Futures Trading Commission had filed a civil complaint against Zhao, stating that the CEO had violated numerous regulations. Zhao had called the civil suit “unexpected and disappointing” and addressed the agency’s complaints in a previous blog post.

See also: US civil suit against Binance.com: What’s the real motivation?