Financial watchdog alleges Binance lied to regulators and syphoned investors’ funds into separate company

Binance and Zhao allegedly undermined the company's own compliance, courted U.S. investors and traded against its customers using market-making companies.

The SEC is suing Binance and its CEO, Changpeng Zhao. The WSJ reported the lawsuit accuses the world's biggest crypto exchange of operating an illegal exchange. Zhao tweeted Monday morning that the company had yet to see the complaint.

The U.S. Securities and Exchange Commission sued crypto exchange Binance, the operating company for Binance.US and Binance founder and CEO Changpeng "CZ" Zhao on allegations of violating federal securities laws on Monday.

The Securities and Exchange Commission (SEC) has sued Binance and its founder Changpeng Zhao for violating security rules

The SEC’s complaint also alleged that Binance and Zhao secretly control customers’ assets, allowing them to commingle and divert customer funds.

The SEC has sued Binance, BAM Trading Services, and founder Changpeng Zhao for violating U.S securities laws, including the operation of an unregistered exchange.