Binance Founder Changpeng Zhao Received $62.5M From Exchange Accounts in Late 2022
Did Binance founder Changpeng Zhao transfer Binance customer deposit funds into his own account? | Credit: Pixabay
- SEC alleges CZ personally received $62.5 million from Binance accounts
- SEC lawsuit claims CZ has been using Merit Peak to siphon billions in customer funds
- Another CZ-controlled firm, Sigma Chain, has been receiving hundreds of millions of dollars from Binance accounts
World’s biggest crypto trading platform, Binance, and founder Changpeng Zhao are being sued by the US Securities and Exchange Commission for commingling customer funds for corporate and personal benefits. Among the allegations, the SEC claims to have found that CZ has personally received $62.5 million from Binance accounts. The funds join others the SEC claims CZ received through offshore companies he wons.
SEC Vs Binance/CZ
The SEC filed a series of lawsuits against the world’s biggest crypto trading platform, Binance, and its founder, Changpeng Zhao. The lawsuits are a result of an investigation launched in 2019 regarding financial mismanagement and evasion of regulation by Binance and CZ. SEC has filed 13 lawsuits in total against the company and its founder, ranging from allegations of wash trading to commingling customer funds and corporate funds. The SEC and its chair Gary Gensler, in the process of litigation, are adamant on bringing the crypto trading platform and its founder to justice, to the extent that some believe that the DOJ may file criminal charges against the defendants.
SEC’s investigations into Binance’s financial activities claim that large sums of customer funds were transferred from their assigned bank accounts to offshore accounts that belong to companies controlled by CZ. Among the several alleged controversial fund transfers is a $62.5 million transfer made from Binance’s account to CZ’s personal account. Other alleged evidence found through SEC’s investigation includes transfers made to Merit Peaks, an offshore trading company owned by CZ, and other transfers made to Sigma Chain, a Singapore-based trading company run by CZ’s associate Guaying Chen.
SEC claims also to have found proof that Chen was made the Primary Admin User of Binance US’ financial account, enabling her to freely withdraw from and deposit to five bank accounts tied to Binance. Among these accounts is one that holds customer funds, and another that holds corporate funds.
Latest Updates On The Case Against Binance & CZ
Since filing the thirteen lawsuits against Binance and its founder, the SEC, chaired by Gary Gensler, has requested the federal government to freeze all financial accounts relating to Binance US. Moreover, crypto legal expert John Deaton speculates the DOJ might be pressing criminal charges against the company and its founder.
The SEC has also filed a lawsuit against Binance’s main competitor, Coinbase, citing the platform as an unregistered trader, while listing several registered securities. The news of Coinbase’s case comes shortly after the second anniversary of Coinbase being approved to be publicly listed by the SEC.
The crypto market, since the announcement of the case against Binance, has been in disarray. Crypto trading has significantly slowed down; key cryptocurrencies such as Bitcoin and Binance’s own token, BNB, have dropped in value, and shares in the market have decreased in value by 22%.
