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Changpeng Zhao Binance CEO Receives Summons from US Court

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The United States district court issued a summons for Changpeng Zhao, Binance CEO after a lawsuit filed by the Securities and Exchange Commission (SEC).

SEC accused Binance and its CEO of supposed unregistered securities activities.

The lawsuit the SEC filed against Binance listed up to 13 counts of charges.

The majority of these charges are related to claims of sales of internal products and services which weren’t registered.

More Details of the Story

On June 7, a significant development occurred in the cryptocurrency industry as the CEO of Binance, Changpeng Zhao (CZ) received a summons from a United States district.

This summons came after just 2 days after the SEC filed an official lawsuit against the global giant crypto exchange for allegedly carrying out unregistered securities operations.

READ ALSO: Social Media Platforms Advertising Misleading crypto assets

What the summons read was “a suit has been filed against you”, just as brief as that. It doesn’t disclose many details related to the allegations.

Both the SEC and Binance have not sent out immediate information regarding the summons.

Details of the Summons

The summons doesn’t demand that CZ has to make a personal appearance to the district court.

But legally, he is mandated to respond immediately after the summons is served to him.

The document shows that immediately it is served, both Binance and its CEO will have only a grace period of 21 days to respond to the service.

Failure to issue a response May likely lead to a default judgment against them for the relief demanded in the complaint.

Backstory

On June 5, it was revealed that the SEC lawsuit against Binance lodged 13 count charges against the crypto exchange.

Primarily, the charges involve allegations of unregistered sale of its internal products and services.

Also, accusations revolve around Binance’s crypto staking program and supposed failure to appropriately register the company’s parent and US arms as exchanges.

However, at the time, Binance contested the SEC’s accusations.

The company emphasized its difference from the former exchange failures. For instance; the FTX collapse.

Responding to the SEC action, Binance said that “we are different from others” while reporting that its business structure isn’t analogous to the other crypto exchanges.

According to a reliable source, Binance denied ever misusing its crypto exchange.

It further dismissed allegations that it “drained user’s funds” or “collateralized borrowings”.

Furthermore, Binance disproves accusations of making “large sponsorships” to bodies in the media and entertainment sectors or “large donations” to political candidates.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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