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SEC to reportedly investigate Binance.US over trading affiliates

Exchange

thecoinrise.com 16 February 2022 03:11, UTC
  
Reading time: ~2 m

The United States Securities and Exchange Commission (SEC) is reportedly investigating the relation of the crypto exchange giant Binance.US and its CEO Changpeng Zhao with the trading firms.

On Tuesday, the Wall Street Journal published a report which says that the SEC is scrutinizing the relationship between trading firms Sigma Chain AG and Merit Peak and Binance.US. The Fed regulatory body is reportedly asking for information from the U.S. crypto exchange platform on the two firms. SEC is investigating how this information may have disclosed its potential relations to the market makers to users.

Zachary Tindall, a Binance.US representative, has refused to comment on the SEC probe and any connection with the two companies. He said that the exchange is committed to upholding the highest standards of regulatory compliance.

Crypto firms and Binance.US

As per the corporate documents from 2019, the two firms are connected to the Binance executives Zhao by acting as the market markers. Both the companies buy and sell crypto on Binance.US, which results in less price volatility.

Last year, both the Department of Justice and the Internal Revenue Service were reportedly investigating Binance, which plans to launch a crypto exchange in Indonesia to stop U.S. residents from using crypto for illegal transactions.

Amid the growing regulatory pressure last year, the company welcomed the first Chief Liaison Officer to comply with the regulatory requirements.

Stephen Milton, a spokesperson for the exchange giant, said that the company would not disclose any details of its investor or corporate structure as it is a private company. He, however, added that the “information is shared with regulators when requested.”

In order to bring an enforcement action, the SEC would need to create an impression on Binance.US that it has jurisdiction over some crypto tokens that the exchange offers.

According to the U.S. SEC, the digital tokens that are considered securities fall under its supervision, while crypto companies say regulators have not proven which tokens are securities.


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