US SEC “touches” Binance.US

The US Securities and Exchange Commission has reportedly opened an investigation into the US branch of the Binance exchange into trading companies linked to CEO Changpeng Zhao.

According to a Wall Street Journal report Tuesday, the SEC Consider Relationship between Binance.US and trading companies Sigma Chain AG and Merit Peak. The regulator has requested information from the US stock exchange about the two companies and is investigating how they might have disclosed potential ties to market makers to users.

The newspaper reported that company documents from 2019, as well as former Binance executives, linked Zhao to both exchange companies. Sigma Chain AG and Merit Peak, acting as market makers, simultaneously buy and sell cryptocurrencies on Binance.US, which often reduces price volatility.

It remains unclear how the SEC will pursue legal action against the entities once the investigation is complete.

As of Jan. 20, the regulator has launched 97 enforcement actions against crypto companies, including Poloniex and Blockchain Credit Partners, with fines totaling $2.35 billion between 2013 and 2021.

In May 2021, Binance was under investigation by both the Justice Department and the Internal Revenue Service for blocking US citizens from using cryptocurrencies for illegal transactions. A March report indicated that the Commodity Futures Trading Commission is also investigating the major exchange for US user activity. CEO Changpeng Zhao denied all allegations of stock market misconduct at the time.

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