US district court issues summons for Binance CEO Changpeng Zhao over SEC action

The United States district court in Washington, D.C. issued a summons for Binance CEO Changpeng Zhao on June 7, just two days after the Securities and Exchange Commission (SEC) formally sued the exchange for alleged unregistered securities operations. 

“A lawsuit has been filed against you,” the summons read.

While details are scarce at this time, the summons viewed by Cointelegraph did not appear to have been marked as served, and an immediate request for information was not returned by the SEC or Binance. 

Zhao won’t necessarily have to appear in person; however, he is legally required to respond to the summons once served.

Per the document, once service occurs, Binance and its CEO will have 21 days to respond. “If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint.”

The SEC’s lawsuit against Binance, made public on June 5, levied 13 charges against the cryptocurrency exchange, the majority of which related to allegations of unregistered sales of its internal products and services, its cryptocurrency staking program and the company’s supposed failure to properly register its primary and U.S. arms as exchanges. 

Related: SEC sues Coinbase for breaking US securities rules

Binance disputes the SEC’s allegations. In a statement given in response to the SEC action, the company stated, “We are different than ___,” intimating that its business model wasn’t comparable to previous exchange failures — such as the FTX collapse. 

As Cointelegraph recently reported, Binance denies that its exchange ever “siphoned consumers’ funds” or “collateralized borrowings.” The company also claims it never gave “large donations” to political candidates nor made “large sponsorships” to entertainment and media entities.

Source: Read Full Article