According to a November 27 report by the Wall Street Journal, the US Securities and Exchange Commission (SEC) is still looking for evidence that Binance.US has a backdoor that can control customer assets in such a way that Similar to FTX.
In June, the SEC filed a lawsuit against Binance and Binance.US, accusing the exchange of engaging in the sale of unregistered securities and accusing Binance and its founder of engaging in a complex conspiracy. involving fraud, conflicts of interest, lack of legal responsibility. disclosure and intentional disregard of the law.
One of the allegations is that the exchange redirected customer assets at its discretion, including sending funds to Switzerland-based Sigma Chain under Zhao's control.
During a November 27 hearing in federal court, lawyers for Binance.US reportedly argued that the securities regulator has no evidence that the assets were misused, and that asked Judge Zia Faruqui to XEM stopping the securities regulator's investigation into potential fraud.
Binance.US lawyer Matthew Laroche also cited the skyrocketing costs of the lawsuit, noting that Binance.US assets have dropped nearly 90% and its user base has halved since the SEC filing lawsuit.
The request comes as Binance and CZ agreed to plead guilty to violating US anti-money laundering laws as part of a $4.3 billion settlement with the Justice Department, Treasury Department and Commodity Futures Trading Commission United States (CFTC) last week.
However, the US Department of Justice lawsuit does not include any of the SEC's fraud-related claims stemming from its lawsuit against the cryptocurrency exchange in June.
CZ could face up to 18 months in prison under federal sentencing guidelines.
