The US SEC’s lawsuit against Binance has been strengthened by a $4.3 billion legal settlement between the company, the Justice Department, and other US agencies. The SEC has nothing to do with this settlement, but plans to take legal proceedings against Binance, the world’s largest cryptocurrency exchange.
The ongoing legal battle against Binance
On December 8, the SEC asked a federal court in Washington, D.C., to review the admissions made as part of a legal agreement signed on November 21 by Binance and its former CEO Changpeng Zhao. The SEC filed a lawsuit against Binance and Binance in June. Zhao accuses them of fraudulently using customer funds, defrauding investors and regulators, and violating securities laws. However, the SEC has countered that Binance’s defense is not legally sound and rather distorts various laws.
The SEC argues that Binance’s defense could jeopardize important precedents in U.S. securities law. Regulators argue that Binance’s approach creates a rigid model that does not fit the current legal context.
The court also required Changpeng Zhao to remain in the United States.
After Zhao admitted the charges against him, U.S. District Judge Richard Jones ruled on December 7, 2023 that Zhao must remain in the United States until sentencing. Due to the severity of Zhao’s crimes in the United States, he cannot return to the UAE, where he resides, according to Judge Jones. According to the petition, Zhao, who resigned as CEO of Binance, could face up to 10 years in prison and is likely to receive 18 months in prison. As part of the settlement, he also agreed to pay a $50 million fine.
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