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June 5 (Reuters) - The world's largest crypto exchange Binance and its CEO Changpeng Zhao operated a "web of deception" that included artificially inflating its trading volumes and diverting customer assets, the U.S. Securities and Exchange Commission alleged on Monday. The agency on Monday sued Binance and Zhao for failing to restrict U.S. customers from its platform and misleading investors about its market surveillance controls, as well as for operating an unregistered securities exchange. "We allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law,” said SEC Chair Gary Gensler said in a statement. The world's biggest crypto exchange, Binance was founded in Shanghai in 2017 by CEO Changpeng Zhao, a Canadian citizen born and raised until the age of 12 in China. Binance's global trading platform, Binance.com dominates the crypto trading landscape, last year processing trades worth about $65 billion a day with up to 70% of the market.

Persons: Zhao, Binance, ”, Gary Gensler, BNB, Changpeng Zhao, Jonathan Stempel, Hannah Lang, Tom Wilson, Nick Zieminski Organizations: U.S . Securities, Exchange Commission, Washington , D.C, SEC, Sigma, Binance, U.S . Commodity Futures Trading Commission, Justice, Reuters, Silvergate, Thomson Locations: Washington ,, Shanghai, Canadian, China, Cayman Islands, Silvergate Bank, New York, Washington, London

REUTERS/Dado Ruvic/IllustrationJune 5 (Reuters) - The U.S. Securities and Exchange Commission (SEC) on Monday accused the world's largest crypto exchange, Binance, and its founder Changpeng Zhao, of operating an "elaborate scheme to evade U.S. federal securities laws." The SEC charged Binance and Zhao with 13 offences, including operating an unregistered securities exchange and failing to restrict U.S. customers from its platform. "Any allegations that user assets on the Binance.US platform have ever been at risk are simply wrong," Binance said. Merit Peak and Sigma Chain were used to transfer tens of billions of dollars involving Binance, Binance.US and other related entities, the SEC said. Zhao instructed Binance.US to onboard Sigma Chain and Merit Peak as market makers on the Binance.US platform, the SEC said.

Persons: Dado Ruvic, Changpeng Zhao, Zhao, Binance, Binance.US, Chain’s, Angus Berwick, Michelle Price, Nick Zieminski Organizations: REUTERS, U.S . Securities, Exchange Commission, SEC, Peak's, Reuters, Silvergate Bank, Sigma, BUSINESS Zhao, BAM, Sigma Chain, U.S, Thomson Locations: U.S, Switzerland, Binance.US, Shanghai, Cayman Islands

The Securities and Exchange Commission has accused Binance, the world’s largest cryptocurrency exchange, of mishandling customer funds as well as lying to regulators and investors about its operations in a sweeping case filed in federal court on Monday. The Wall Street regulator said Binance had been mixing billions of dollars in customer funds and secretly sending them to a separate company called Merit Peak Limited, which is controlled by Binance’s founder, Changpeng Zhao. The charges included misleading investors about the adequacy of its systems to detect and control manipulative trading and about its efforts to restrict U.S. investors from trading on its unregulated platform. In its court filing, the S.E.C. cited a 2018 email from Binance’s chief compliance officer saying “we do not want [Binance.com] to be regulated ever.”

Persons: Binance, Changpeng Zhao, Zhao “, ” Organizations: Securities, Exchange, Binance’s, Regulators, Court Locations: Washington

LONDON, June 5 - A senior Binance executive was the main operator for five bank accounts belonging to the giant cryptocurrency exchange’s purportedly independent U.S. affiliate, including an account that held American customers’ funds, bank records show. This allowed Chen and her deputies to move funds held in the bank accounts. The previously unreported bank records and messages show that Binance’s management over the U.S. business’s finances extended across its bank accounts at Silvergate and detail how this secret access was granted. Binance.US has denied that Binance ever operated its bank accounts. ‘PRIMARY ADMIN USER’The Binance.US trading platform was launched by its operating firm, BAM Trading, in mid-2019 under chief executive Catherine Coley.

Persons: Guangying Chen, Changpeng Zhao, Chen, Binance, Binance.US, Krishna Juvvadi, Christian Hertenstein, Brian Shroder, ” Hertenstein, Zhao, “, Chen’s, Juvvadi, Reutersalso, Peak’s, Catherine Coley, Coley, Silvergate, James McDonald, Hertenstein, ”, Susan Li, Li messaged, Li, Angus Berwick, Tom Wilson, Janet McBride, Michael Williams Organizations: Silvergate Bank, U.S, Reuters, BAM, U.S . Commodity Futures Trading Commission, CFTC, “, Thomson Locations: U.S, Washington, American, US, Binance, Shanghai, Binance.US

☆ PDD, Shein, Binance: These hugely successful companies were born in China. They don't want you to know that
▼ + stars: | 2023-05-04 | by ( Michelle Toh | ) edition.cnn.com time to read: +10 min

Hong Kong CNN —Binance, the world’s largest cryptocurrency exchange, doesn’t want to be called a Chinese company. “Our opposition in the West bends over backward to paint us as a ‘Chinese company,’” he wrote in a blog post last September. Zhao has been vocal about how he feels his firm is misrepresented as a "Chinese company." The same concern could, in theory, apply to any Chinese company. TikTok CEO Shou Chew testifying before US Congress in March.

For years, the giant cryptocurrency exchange Binance has had a reputation for dodging regulators and skirting financial rules, all without significant consequences. Now the world’s largest crypto exchange is facing mounting legal pressure. Justice Department prosecutors are investigating the exchange for money laundering violations, as the Securities and Exchange Commission is looking into the company’s business practices. Last month, another agency, the Commodity Futures Trading Commission, sued Mr. Zhao, accusing him of compliance failures that allowed criminals to launder money on Binance. “It’s the biggest exchange for crypto, and if it gets clamped down on, that’s going to be a big deal,” said Hilary Allen, a crypto expert at American University.

☆ CFTC Charges Against Binance Highlight Role of Former Compliance Chief
▼ + stars: | 2023-03-30 | by ( Mengqi Sun | ) www.wsj.com time to read: 1 min

A Binance spokeswoman called the complaint filed by the CFTC ”unexpected and disappointing as we have been working collaboratively with the CFTC for more than two years.”The suit by U.S. regulators against Binance Holdings Ltd. focuses in large part on the work of the cryptocurrency exchange’s former chief compliance officer, alleging he willfully aided and abetted the firm in evading U.S. laws. Samuel Lim, Binance’s compliance chief between 2018 and 2022, faces civil charges of undermining Binance’s compliance program and conducting activities to evade rules designed to prevent illicit financial activity, the Commodity Futures Trading Commission said Monday.

☆ Binance Sued by CFTC Over Evading U.S. Rules
▼ + stars: | 2023-03-27 | by ( Dave Michaels | ) www.wsj.com time to read: 1 min

Photo: Eric Lee for The Wall Street JournalThe CFTC and other federal agencies have been investigating Binance for several years. The Commodity Futures Trading Commission on Monday sued Binance Holdings Ltd., alleging the operator of the world’s largest cryptocurrency exchange violated U.S. rules that require futures and other derivatives to be traded on regulated platforms. The CFTC’s lawsuit also named Binance founder Changpeng Zhao and Samuel Lim , who the agency said was Binance’s first chief compliance officer, as defendants. The lawsuit seeks restitution and fines as well as an order that would prevent the companies from any continuing conduct that violates U.S. rules.

☆ Binance.US Cleared to Buy Voyager Accounts Despite SEC Warning
▼ + stars: | 2023-03-07 | by ( Soma Biswas | ) www.wsj.com time to read: 1 min

Binance’s American affiliate won court approval to take over thousands of customer accounts from bankrupt crypto platform Voyager Digital Ltd. despite warnings that the Binance.US exchange faces possible regulatory action. Judge Michael Wiles of the U.S. Bankruptcy Court in New York approved the companies’ deal, undeterred by the revelation last Friday that Securities and Exchange Commission staff have determined that Binance.US, the American affiliate of the world’s largest crypto exchange, is operating an unregistered securities exchange.

☆ Texts From Crypto Giant Binance Reveal Plan to Elude U.S. Authorities
▼ + stars: | 2023-03-05 | by ( Caitlin Ostroff | Patricia Kowsmann | ) www.wsj.com time to read: 1 min

Binance exploded onto the crypto scene in 2017 and grew into the world’s biggest digital-currency exchange. It quickly ran into a problem. It largely operated from hubs in China and then Japan, yet a fifth of its customers were in the U.S., where authorities signaled a coming crackdown on unregulated offshore crypto players. Any lawsuit from U.S. regulators would be like “nuclear fall out” for Binance’s business and its officers, a Binance executive warned colleagues in a 2019 private chat.

☆ Binance reportedly had secret access to its US arm's bank account
▼ + stars: | 2023-02-17 | by ( ) edition.cnn.com time to read: +5 min

The US partner of global cryptocurrency exchange Binance has confirmed that a trading firm managed by Binance CEO Changpeng Zhao operated as a market maker on its platform. It did not elaborate on when in 2021 the activity ceased, or comment on Zhao’s role at the trading firm. A spokesperson for Binance.US referred CNN to its Thursday tweet, emphasizing the line that reads: “ONLY Binance.US employees have access to Binance.US bank accounts. Before that story’s publication, Binance.US had told Reuters that “Merit Peak is neither trading nor providing any kind of services on the Binance.US platform,” without giving further details. Adobe StockBinance.US’s executives were concerned by the outflows from the Silvergate account to Merit Peak because the transfers were taking place without their knowledge, according to the messages reviewed by Reuters.

☆ Binance Hires Gemini Executive as Chief Compliance Officer
▼ + stars: | 2023-02-14 | by ( Mengqi Sun | ) www.wsj.com time to read: +2 min

Binance said Noah Perlman has joined as its chief compliance officer from rival Gemini Trust Co., as the cryptocurrency exchange continues to beef up its legal and compliance team amid regulatory scrutiny. Mr. Perlman joined Binance last month after serving as Gemini’s chief operating officer for more than two years. He joined Gemini as its chief compliance officer in 2019. Mr. Perlman’s appointment ends a monthslong search for a compliance chief at Binance, which over the past year or so has been bolstering its compliance team head count. Binance Chief Executive Changpeng Zhao, known as CZ, said on Twitter in September that the exchange planned to hire a few hundred more compliance people.

☆ Regulator Orders Crypto Firm Paxos to Stop Issuing Binance Stablecoin
▼ + stars: | 2023-02-13 | by ( Patricia Kowsmann | Caitlin Ostroff | ) www.wsj.com time to read: 1 min

BUSD, also known as Binance USD, is a stablecoin backed by U.S. dollars on a one-to-one basis. New York regulators directed a crypto company to stop issuing one of the largest dollar-pegged cryptocurrencies, as a government clampdown on the sector widens. The New York Department of Financial Services ordered Paxos Trust Co., which issues and lists Binance’s dollar-pegged cryptocurrency, to stop creating more of its BUSD token, Binance said in a statement. Paxos will continue to manage redemptions of the product, the crypto exchange added.

☆ Crypto Firm Paxos to Stop Issuing Dollar-Pegged Binance Token
▼ + stars: | 2023-02-13 | by ( Patricia Kowsmann | Caitlin Ostroff | ) www.wsj.com time to read: 1 min

New York regulators directed a crypto company to stop issuing one of the largest dollar-pegged cryptocurrencies, as a government clampdown on the sector widens. The New York Department of Financial Services ordered Paxos Trust Co., which issues and lists Binance’s dollar-pegged cryptocurrency, to stop creating more of its BUSD token. Paxos will continue to manage redemptions of the product, according to a Binance statement.

☆ Binance briefly halts US dollar withdrawals
▼ + stars: | 2023-02-06 | by ( Allison Morrow | ) edition.cnn.com time to read: +1 min

CNN —Binance, the world’s largest crypto exchange, said it would temporarily halt transfers of US dollars starting Wednesday. The suspension comes at an awkward time for crypto companies, and especially for centralized exchanges like Binance, which in November briefly considered a bailout of its rival FTX. That platform, which was in the midst of a liquitdity crisis, ultimately filed for bankruptcy and is now at the center of a massive federal fraud investigation. FTX’s collapse ricocheted across the ecosystem for digital assets, sparking panic among investors and forcing other firms into liquidity crises of their own. Several, including Genesis, have since filed for bankruptcy.

☆ Risk Management at Crypto Firms Is in Focus Following FTX Collapse
▼ + stars: | 2023-01-09 | by ( Mengqi Sun | ) www.wsj.com time to read: +7 min

Cryptocurrency companies are disclosing more information about their internal controls and risk management following the collapse of FTX, but a level of transparency in the industry that would make many investors feel comfortable remains far off. Jeff Horowitz, BitGo chief compliance officer Photo: Jeff Horowitz“We need better risk management, more guardrails…and we need some of that installed into the crypto industry,” said Jeff Horowitz, chief compliance officer at crypto custodian BitGo. Although most crypto firms aren’t subject to formal federal regulation, many have adopted the enterprise-risk-management programs that U.S. watchdogs require of mainstream financial institutions in the wake of the 2008 financial crisis. As the crypto industry matures, these executives said it is important for investors and consumers to check for signs of adequate risk management and compliance measures at crypto firms. Other signs include whether the company engages in outside due diligence, whether assets are segregated and how secure crypto assets passwords are kept.

☆ Binance withdrawals jumped to $3 billion in 24 hours, Nansen says
▼ + stars: | 2022-12-14 | by ( Michelle Toh | ) edition.cnn.com time to read: +3 min

Hong Kong CNN —Investors withdrew as much as $3 billion from Binance on Tuesday, according to blockchain analytics firm Nansen, as a deluge of negative headlines about the cryptocurrency industry rattled users of the world’s largest exchange. Andrew Thurman, content lead for Nansen, told CNN that at its peak, Binance saw “as high as $3 billion in net outflows” over a 24-hour period. Binance CEO Changpeng Zhao said that the exchange had at one point seen “some withdrawals” of roughly $1.1 billion. The founder of Binance’s one-time competitor, Sam Bankman-Fried, was arrested in the Bahamas this week after US prosecutors filed criminal charges against him. On Tuesday, Bankman-Fried was indicted in the United States on eight criminal charges including wire fraud and conspiracy.

☆ Binance Is Trying to Calm Investors, but Its Finances Remain a Mystery
▼ + stars: | 2022-12-10 | by ( Jonathan Weil | ) www.wsj.com time to read: 1 min

Binance’s “commitment to transparency” has just gotten started, but it has a long way to go before it discloses enough meaningful information to give investors confidence in its future, accounting and financial specialists say. The world’s largest cryptocurrency exchange is seeking to reassure customers about the safety of their holdings after the collapse of FTX. Binance’s position means its success or failure will weigh heavily on the entire crypto market.

☆ Binance still has big growth plans despite crypto market meltdown
▼ + stars: | 2022-12-01 | by ( Diksha Madhok | ) edition.cnn.com time to read: +2 min

New Delhi CNN Business —Binance is expanding into new markets even as the crypto industry grapples with turmoil unleashed by the spectacular collapse of crypto exchange FTX. The world’s biggest cryptocurrency exchange has acquired Sakura Exchange BitCoin (SEBC), a crypto exchange registered in Japan, Binance said on its website Wednesday. The deal would allow Binance to enter the world’s third biggest economy as a regulated entity. The purchase of SEBC marks Binance’s first license in East Asia, the company said. “We will actively work with regulators to develop our combined exchange in a compliant way for local users,” said Takeshi Chino, general manager of Binance Japan.

☆ Crypto exchanges enabled online child sex-abuse profiteer
▼ + stars: | 2022-11-23 | by ( ) www.reuters.com time to read: +22 min

These sites often included links for users to pay via crypto exchanges, the IWF told Reuters, declining to name companies. “For those people looking to make money from child sexual abuse, crypto has lowered the barrier,” said Dan Sexton, the IWF’s chief technology officer. The Dark Scandals website, owned by Michael Mohammad, instructs users to send tokens to a Dark Scandals digital wallet to purchase content. While banks and payment platforms demanded more details from online merchants, many crypto exchanges for years requested little or no information from clients. The IWF received more reports last year of websites selling child abuse imagery for crypto than any year prior.

☆ FTX spent $300mln on Bahamas real estate, 'substantial' assets missing, lawyers say
▼ + stars: | 2022-11-22 | by ( ) www.nbcnews.com time to read: +6 min

Crypto exchange FTX was run as a “personal fiefdom” of Sam Bankman-Fried, attorneys for the firm said on Tuesday, describing that one of the company’s units spent $300 million on Bahamas real estate. An attorney said the $300 million spent on real estate was largely homes and vacation properties for senior staff. At the hearing, an attorney for FTX also said that the company continues to suffer cyberattacks as bankruptcy begins, and that “substantial” assets are missing. Bankman-Fried, FTX and the Bahamas liquidators did not immediately respond to requests for comment. FTX said that it was communicating with U.S. regulators and bankruptcy court officials, but did not mention Bahamas regulators.

☆ FTX’s Sam Bankman-Fried cashed out $300 million during funding spree - WSJ
▼ + stars: | 2022-11-18 | by ( ) www.reuters.com time to read: +1 min

Nov 18 (Reuters) - FTX founder Sam Bankman-Fried sold a stake in the company worth $300 million when the crypto exchange raised capital last year, the Wall Street Journal reported on Friday, citing the firm's financial records and people familiar with the transaction. Bankman-Fried and FTX did not immediately respond to Reuters' requests for comment on the matter. The Journal's report cited FTX's October 2021 funding round where the company had raised $420 million from a clutch of big name investors including Temasek and Tiger Global, valuing the crypto exchange at $25 billion. Last week, FTX filed for U.S. bankruptcy protection and Bankman-Fried resigned as chief executive, after Binance walked away from its proposed acquisition. Several crypto firms have since been bracing for a fallout from the FTX collapse, with many counting their exposure in millions to the beleaguered exchange.

☆ FTX says it could have over 1 million creditors
▼ + stars: | 2022-11-15 | by ( Ryan Browne | ) www.nbcnews.com time to read: +4 min

Beleaguered cryptocurrency exchange FTX may have more than 1 million creditors, according to a new bankruptcy filing, hinting at the huge impact of its collapse on crypto traders. Last week, when it filed for Chapter 11 bankruptcy protection, FTX indicated that it had more than 100,000 creditors with claims in the case. But in an updated filing Tuesday, lawyers for the company said: “In fact, there could be more than one million creditors in these Chapter 11 Cases.”Typically in such cases, debtors are required to provide a list of the names and addresses of the top 20 unsecured creditors, the lawyers said. Over the past 72 hours, FTX has been in contact with “dozens” of regulators in the U.S. and overseas, the company’s lawyers wrote. Over the weekend, FTX was hit with an apparent cyberattack resulting in the theft of more than $400 million worth of tokens.

☆ FTX: Customers who trusted crypto giant may be left with nothing
▼ + stars: | 2022-11-14 | by ( Allison Morrow | ) edition.cnn.com time to read: +5 min

But a liquidity crunch last week forced FTX to halt withdrawals, leaving customers and investors in limbo. In theory, FTX’s customers should get a cut of what’s left of the company’s assets at the end of the bankruptcy process. And FTT coins, the crypto token issued by FTX, have lost more than 90% of their value over the past week.) But I think this is actually good for the industry long-term.”The giant crypto exchange briefly emerged as a lifeline for FTX before reversing course last week. Correction: An earlier version of this article misstated the name of the law firm Loeb & Loeb.

☆ Crypto: What's next as FTX collapse triggers 'Lehman moment'?
▼ + stars: | 2022-11-11 | by ( Julia Horowitz | ) edition.cnn.com time to read: +7 min

And can the beaten-down crypto industry bounce back? What’s clear is that the fallout from the FTX crisis injects significant volatility into the crypto ecosystem. “Thank God!”Can the crypto industry survive? “In the short term, this is going to be really, really bad for the crypto industry,” said Jog of Sei Labs. Fok said he expects the FTX collapse will push institutional investors away from the crypto space just as they had been warming up to it.

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