SEC believes Binance and ex-CEO Changpeng Zhao crimes were similar to fraud witnessed in FTX

Binance exchange and its founder Changpeng Zhao (CZ) remain as the focus of regulatory troubles in the US, with both the US Department of Justice (DoJ) and the Securities and Exchange Commission (SEC) clamping down against the largest cryptocurrency exchange by trading volume.

Also Read: BNB price loses key support as US DoJ calls Binance CEO Changpeng Zhao a flight risk

Binance and its founder may have committed FTX-style fraud, SEC pushes

Binance and its founder CZ committed FTX-style fraud, according to the US SEC, which alleges that they may have a backdoor to control assets stored on the Binance.US platform, just like FTX and Sam Bankman-Fried did with Alameda Research.

Based on a report in the Wall Street Journal, the SEC is still looking for evidence to prove that Binance and CZ may have a backdoor to control assets stored on the Binance.US platform. The financial regulator started pursuing Binance and Binance.US in June on allegations that they operated illegal securities exchanges.

The lawsuit filed by the companies also depended on the financial regulator’s concerns about the potential for Binance to expropriate the American crypto assets in an FTX-style fraud. However, community members defend that Binance did not cause harm to retail investors like FTX did.

It all comes after CZ capitulated to the US SEC last week, pleading guilty to the levied charges including money laundering and breaking sanction laws. In the latest, the US DoJ has denied CZ from leaving the US before sentencing.