- Allegedly CEO of the exchange is suspected of misappropriation of client funds
- The department filed two petitions at once to speed up the process
- They also insist on the repatriation of assets if the petition is granted.
Yesterday, June 6, the Securities and Exchange Commission (SEC) re-applied to the court with a petition to arrest the crypto assets of the Binance exchange and its CEO. The reason for this was the accusation of CZ in the misuse of client funds.
The appeal can be found at link. In the filing, the SEC alleges that Binance diverted its clients’ funds into Zhao’s personal funds.
Allegedly, it was at the expense of these funds that CZ bought his yacht for $11 million. Also, as stated in the department, the assets placed on the platform were used to purchase BUSD in order to support the stablecoin.
These SEC requirements are fully consistent with those put forward by the regulator during the freezing of the Bankman-Fried accounts. But at the same time, the case of the Commission against Binance and its CEO is civil, not criminal.
The department insists on an immediate freeze in order to protect clients’ funds. If the petition is granted, the assets will be confiscated until the process is completed. The company has not yet commented on the new requirements of the regulator.
Recall that the SEC filed a lawsuit earlier this week. Binance, a number of its portfolio organizations, and CZ personally were charged with 13 counts, including violation of industry laws.
The company considers the regulator’s claim unfounded. Notably, in the process, the SEC designated a number of assets as securities. A victory in court over Binance will transfer most of the large tokens under the control of the department and create an extremely dangerous precedent.