Binance.US – Binance’s US native exchange – has announced it is suspending all US dollar deposits in the wake of being sued by the Securities and Exchange Commission (SEC).
The cryptocurrency exchange stated that the temporary suspension of fiat deposits will be enforced today (9 June) and move to an all-crypto transaction operation for the time being, as the company tweeted it is “open to a productive compromise” amidst SEC allegations.
The SEC sued the world’s largest crypto exchange last Monday on the basis they believe Binance to be running an unregistered securities exchange in the US, as well as circulating and trading unregistered securities tokens in the form of Binance’s native tokens BUSD and BNB.
The 13 allegations against Binance also include rerouting billions of investor dollars to companies owned by CEO Changpeng Zhao, as well as the acknowledgement of conflicts of interest and a “calculated evasion of the law”.
The SEC are now seeking a temporary restraining order to freeze all Binance assets after the regulators accountant, Sachin Verma, unveiled that Zhao sent upwards of $12bn to a slew of companies he owned.
A court filing reads: “The SEC has been unable to determine why a Zhao-controlled entity that was purportedly trading on the Binance.US Platform using Zhao’s personal funds would have acted as a ‘pass through’ account for billions of dollars of Binance Platforms customers’ funds.”
The SEC court filing further states that the funds sent to numerous companies had no affiliation with Binance to what they deem to be “offshore” accounts.
The Commodity Futures Trading Commission also sued Binance in March over violating several Commodity Exchange Act and CFTC regulations, as well as similar allegations to SEC’s complaints over “illegal off-exchange commodity options”.
With legal pressure mounting on Binance from two US financial regulators, its BNB and BUSD tokens price fell sharply upon Monday’s SEC announcement.
The court date for the SEC restraining order to freeze Binance assets is scheduled for 13 June.