US regulator accuses Binance of running an illegal exchange

Federal regulators have sued Binance, the world's largest crypto exchange, accusing the company of running an illegal exchange in the United States and commingling billions of dollars' worth of customer funds.

The Securities and Exchange Commission, Wall Street's primary regulator, alleges the company acted in "blatant disregard" of US securities laws. It also named Binance's CEO Changpeng Zhao, known as CZ, as a defendant.

"Through 13 charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law," said SEC Chair Gary Gensler in a statement Monday.

The SEC also alleges that Zhao and Binance commingled customer assets and even diverted some to an entity controlled by Zhao.

The complaint further alleges that Zhao and Binance knew they were violating US laws.

"Binance's CCO bluntly admitted to another Binance compliance officer in December 2018, 'we are operating as a fking unlicensed securities exchange in the USA bro,' " the complaint reads, referring to the company's chief compliance officer.

A spokesperson for Binance said the company takes the SEC's allegations seriously, but it believes the agency's accusations are "unjustified."