The CEO of Binance, Changpeng Zhao (CZ), has been summoned by the U.S. District Court for the District of Columbia following a lawsuit against him and his exchange. The Securities and Exchange Commission (SEC) had issued a complaint against the exchange two days prior, leading to this development.
The lawsuit was filed against Binance, Binance US, and CZ himself. The entities are required to respond to the summons within 21 days, failing which a default judgment would be entered against them.
The SEC’s 136-page filing accused Binance of selling unregistered securities in the form of BNB and BUSD, operating as an unregistered securities exchange and broker-dealer within the US, and of not maintaining independence from Binance US. Allegedly, billions of dollars in funds from both firms were commingled within Merit Peak, an entity controlled by CZ.
The SEC has also imposed a restraining order on Binance US, freezing its assets pending court approval. However, this order does not affect the international exchange.
Despite the legal challenge, CZ appeared unfazed by the summons, viewing it as a procedural aspect of the lawsuit. Binance has yet to respond to the summons but has expressed its intention to fight the SEC’s complaint, which alleges violations of US securities laws and mishandling of customer funds.
Also Read: Binance & CZ Reply to the SEC Lawsuit with Strong Defense
As the legal proceedings continue, the global digital asset industry watches closely. The case could potentially set a significant precedent for the future of crypto and securities trading business.
