The United States District Court for Washington, D.C., has issued a summons for Binance CEO Changpeng Zhao following the recent legal action taken by the US Securities and Exchange Commission (SEC) against the exchange. The summons grants Zhao a period of 21 days to respond to the allegations made in the SEC’s complaint.
On Twitter, Changpeng Zhao commented that this is simply a routine part of the SEC complaint process and nothing out of the ordinary.
While Binance has yet to respond to the summons officially, the exchange has already indicated its intention to contest the SEC’s complaint vigorously. It is unclear at this time whether the summons has been officially served.
The lawsuit filed by the SEC against Binance on June 5th included a total of 13 charges against the cryptocurrency exchange. Most of the charges pertain to allegations of unregistered sales of internal products and services, the operation of a cryptocurrency staking program, and the alleged failure to register Binance’s primary and US arms as exchanges properly.
The summons, viewed by Coinfea, indicates that a lawsuit has been filed against Changpeng Zhao in relation to the SEC’s actions. Once the summons is officially served, Zhao will be required to respond within the 21-day timeframe specified in the document. Failure to respond may result in a default judgment being entered against him, granting the relief demanded in the complaint.
While details surrounding the served summons’ status are scarce, the SEC and Binance have not provided immediate clarification on the matter.
Binance, in its response to the SEC’s legal action, emphasized that it is different from previous exchange failures and disputes the allegations put forth by the regulator. The company firmly denies any allegations of fund misappropriation or collateralized borrowings. It also states that it has not made large donations to political candidates or engaged in significant sponsorships with entertainment and media entities.
The outcome of this legal battle between Binance and the SEC will have substantial implications for the cryptocurrency exchange industry as a whole. As regulators increasingly focus on ensuring compliance with securities laws in the crypto space, the results of this case will likely shape the regulatory landscape moving forward.