Companies
Binance vs SEC: Court Issues a Summons to Changpeng Zhao (CZ)
The legal fight between the world’s largest cryptocurrency company and exchange Binance and the US Securities and Exchange Commission (SEC) has started to heat up as the court has issued a summons to Changpeng Zhao (CZ).
According to the court filing on Wednesday, June 7th, the United States district court in Washington, DC, has issued a “summons in a civil action” to Binance CEO CZ and other entities involved in the lawsuit to respond within 21 days to “serve on the plaintiff an answer to the attached complaint or a motion under Rule 12 of the Federal Rules of Civil Procedure.”
🚨NEW: @binance CEO @cz_binance has been ordered to respond/answer the summons of a U.S. District Court along with the other entities named in the lawsuit.
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
CZ responded that it was part of the SEC complaint process and did not require him to appear in person. He tweeted:
“I was told this is just part of the SEC compliant process. Nothing new. Also told I won’t have to appear in person. No need to FUD.”
I was told this is just part of the SEC compliant process. Nothing new.
Also told I won't have to appear in person. No need to FUD. 🙏 pic.twitter.com/NYUlBCIirG
— CZ 🔶 Binance (@cz_binance) June 7, 2023
The SEC has delivered the Summons to a CZ’s address in Malta. However, according to Fox Business journalist Eleanor Terrett, an insider revealed that Binance CEO is splitting his time between Paris and Dubai.
New Allegation and Revelation Have Started to Surface
As reported, the week started with a bang when SEC filed a lawsuit against Binance and CZ on Monday, June 5th, for failing to register their exchange as a securities exchange and for offering the trade of unregistered securities. The lawsuit levied 13 charges against the exchange for operating without proper licenses, offering derivative products without authorization, and failing to comply with anti-money laundering and customer protection rules.
Now two days into the dual, new revelations have started to surface. According to a June 7th CNBC report, the SEC filed court documents on Wednesday indicating that Binance lawyers alleged that SEC chair Gary Gensler offered to serve as an advisor to the crypto exchange in 2019 when he was a professor at MIT’s Sloan School of Management.
CNBC: Binance lawyer said that SEC Chair Gary Gensler offered to serve as an advisor to the Binance in several March 2019 when he was teaching at MIT. He became SEC Chair in 2021.
Binance’s lawyers said they’d asked for his recusal from any actions regarding the company. SEC…
— Wu Blockchain (@WuBlockchain) June 8, 2023
Per the report, Gensler also met with CZ in Japan for lunch in March 2019 and interviewed CZ as part of a cryptocurrency course he taught at MIT. However, the Wall Street Journal report indicates that Binance itself approached Gensler. Given SEC Chair’s past relation with CZ, Binance lawyers have asked for Gensler’s recusal of any actions regarding the company.
Furthermore, on Tuesday, June 6th, the SEC filed a motion in the US District Court for the District of Columbia requesting a temporary freeze on Binance US and Zhao’s assets. In the filing, the SEC alleges Binance and Binance.US of redirecting over $12 billion in customer assets to entities controlled by CZ between 2019 and 2021
