On June 7, the United States district court in Washington, D.C., issued a summons for Binance CEO Changpeng Zhao, following the Securities and Exchange Commission’s (SEC) recent lawsuit against the exchange for alleged unregistered securities activities.
He does not have to appear in person but respond within the time frame below 👇🏼 https://t.co/UipLm9TRye
— Eleanor Terrett (@EleanorTerrett) June 7, 2023
Binance faces problems one after the other
Limited information is currently available regarding the summons, and it appears that the document has not been officially served. Despite the lack of an immediate response from the SEC or Binance to requests for information, it is important to note that Changpeng Zhao is legally obligated to respond once the summons is served.
According to the document, Binance and its CEO will have a period of 21 days to provide a response once service takes place. Failure to respond may result in a default judgment being entered against them, leading to the relief sought in the complaint.
The SEC’s lawsuit, which became public on June 5, includes 13 charges against Binance. The allegations primarily focus on the exchange’s purported unregistered sales of internal products and services, its cryptocurrency staking program, and its alleged failure to adequately register its primary and U.S. branches as exchanges.
Binance has raised objections to the allegations made by the SEC. In response to the SEC’s action, the company issued a statement asserting that its business model is distinct from previous exchange failures. The statement implied that Binance should not be equated with incidents such as the collapse of FTX.
The recent actions by the SEC have affected the cryptocurrency market as a whole. The prices of major crypto assets also took a toll.