“You Can Withdraw”: Binance Traders Lose Over N2trn as US Govt Sues Company for Web Deception, Zhao Replies

“You Can Withdraw”: Binance Traders Lose Over N2trn as US Govt Sues Company for Web Deception, Zhao Replies

  • Binance, the world's largest cryptocurrency exchange, has been sued by the US Securities and Exchange Commission (SEC) for alleged web deception
  • The SEC's lawsuit is the second legal challenge faced by Binance this year and comes as part of the US government's increased efforts to regulate the cryptocurrency industry
  • Binance denies the allegations and vows to defend its platform vigorously, criticising the SEC's action as a lack of clarity and guidance from regulators

Crypto giant Binance is facing significant legal challenges as the United States Securities and Exchange Commission (SEC) files a lawsuit against the company and its CEO, Changpeng Zhao.

The SEC accuses Binance of disregarding investor protection rules and mishandling customer funds, referring to the company's actions as a "web of deception."

This lawsuit is part of the US government's increased scrutiny of the cryptocurrency industry.

Binance US government
Binance coin fell heavily hours after the US govt filed a lawsuit. Photo credit: Coin graph
Source: Facebook

The SEC's complaint includes 13 charges, alleging unlawful solicitation of investors, misrepresentation of trading volume, and misleading the public about oversight.

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US securities commission also claims that Binance diverted customer funds to companies controlled by Zhao.

The lawsuit further seeks to ban Binance from operating in the US, warning the public to be cautious about investing in unlawful platforms.

Binance denies any wrongdoing

Binance, founded in 2017 and operating globally, denied the allegations and vowed to defend itself vigorously.

The company claims that customer funds were never at risk and has been engaged in discussions with the SEC.

Binance argues that regulators have failed to provide clear guidance to the digital asset industry and criticises the lawsuit as misguided.

Binance founder Changpeng Zhao also took to his Twitter page to defend the company while asking customers not to worry.

He wrote:

"Our team is all standing by, ensuring systems are stable, including withdrawals and deposits."

Binance troubles

The latest lawsuit is the second filed against Binance in 2023, following a case by the Commodity Futures Trading Commission in March.

The Department of Justice is also investigating the company.

Binance customers lose money

The news of the SEC's lawsuit had an immediate impact, causing a 5% drop in the price of Bitcoin, while Binance coin dropped by 7.51%.

Binance's market capitalisation dropped to $43,154,733,695 at the end of trading on June 6, 2023, from $47,560,448,781 it closed at a day earlier.

This means that $4.40 billion ($2.01 trillion) was wiped off the value of the Binance coin in 24 hours after the US lawsuit.

"Withdraw all your money": Nigerian Crypto firm gives customers 2-week deadline

In another report, Lazerpay, a Nigerian fintech startup that uses cryptocurrency, is shutting down its operations.

The CEO, Njoku Emmanuel, announced the closure and stated that the company could not secure enough funds.

Lazerpay is a two-year-old fintech company that accepts payments in stablecoins and allows merchants to convert their crypto to fiat currency.

Source: Legit.ng

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