However, the SEC also argued in the case that Solana, Polygon, Cardano, and a number of other cryptocurrencies are securities. Some are part of younger, gaming-focused ventures, while others are among the crypto world’s biggest with multi-billion dollar market capitalization. Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), Cosmos Hub (ATOM), The Sandbox (SAND), Decentraland (MANA), Algorand (ALGO), Axie Infinity (AXS), and COTI (COTI) are among of the currencies listed on Binance alongside the exchange’s native BNB token and stablecoin, BUSD.
Binance and BAM Trading, the operator of Binance.US, which Binance has maintained is a distinct entity, are being investigated by the SEC for allegedly acting as exchanges without being registered with the SEC.
Binance and BAM Trading have unlawfully engaged in unregistered offers and sales of crypto asset securities. In so doing, they have deprived investors of material information, including the risks and trends that affect the enterprise and an investment in these securities.
The lawsuit states
In a court filing made on Monday, the SEC accused Binance and its CEO of acting with “blatant disregard” for federal securities laws and of having “enriched themselves by billions of U.S. dollars while placing investors’ assets at significant risk.”
We allege that Zhao and the Binance entities not only knew the rules of the road, but they also consciously chose to evade them and put their customers and investors at risk all in an effort to maximize their own profits.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, in a press release on Monday
The SEC reports that not one but two former CEOs of BinanceUS have voiced grave worry regarding Zhao’s dominance. The company’s first and second CEOs, testified before federal authorities but were not identified by name.
The SEC claims Binance ignored federal law prohibiting the unregistered offer and sale of securities while knowing that tens of thousands of its clients were located in the United States. According to the SEC’s lawsuit, Binance’s 2019 compliance was primarily a show.
According to the SEC’s allegations, Zhao directed the development of an evasion scheme for high-net-worth clients, which included the use of a virtual private network (VPN) to conceal their location inside the United States and the submission of compliance paperwork to conceal their nation of origin.
