In a shocking turn of events, the U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Binance, the popular crypto exchange, as well as its founder and CEO Changpeng Zhao, commonly known as CZ. The allegations suggest that Binance and CZ have violated federal securities laws, putting them in hot water.

According to the lawsuit, Binance, Binance.US, and CZ offered unregistered securities to the public through the BNB token and the Binance-linked BUSD stablecoin. Additionally, the suit accuses Binance’s staking service of violating securities laws. The charges extend to BAM Trading, the operating company for Binance.US, with allegations ranging from failure to register as a clearing agency, broker, and exchange.

The SEC further claims that Binance allowed the commingling of customer funds and accuses CZ of “secretly” controlling Binance.US, while an entity owned and operated by CZ allegedly inflated Binance.US’s trading volume.

What’s more, the lawsuit reveals that Binance permitted U.S. persons to trade on its platform, contrary to their public statements. The suit states that Binance actively assisted high-value U.S. customers in circumventing controls meant to block them from trading on the platform. This covert behavior was motivated by Binance’s desire to avoid accountability for these actions.

The SEC’s allegations don’t stop there. The lawsuit also asserts that several other tokens, including SOL, ADA, MATIC, COTI, ALGO, FIL, ATOM, SAND, AXS, and MANA, are considered securities.

Adding fuel to the fire, Binance’s Chief Compliance Officer reportedly admitted in 2018 that they were operating as an unlicensed securities exchange in the USA, as stated in the suit.

This lawsuit has sent shockwaves throughout the crypto industry, raising significant concerns about Binance’s compliance with regulations and the potential impact on its users. The outcome of this legal battle remains uncertain, but it undoubtedly marks a crucial moment for both Binance and the broader crypto market. Stay tuned for further updates as this story unfolds.