- June 11, 2023
- Posted by: [email protected]
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The United States district court in Washington, D.C., issued a summons for Changpeng Zhao (CZ), the CEO of Binance, following the Securities and Exchange Commission’s (SEC) lawsuit against the exchange for allegedly engaging in unregistered securities operations. The summons stated that CZ’s current residential address is in Malta, a Mediterranean island nation.
The summons, seen by Cointelegraph, indicated that it had not been officially served at that time, and requests for information from both the SEC and Binance did not yield immediate responses. While CZ may not have to appear in person, he is legally obligated to respond once the summons is served.
According to the document, Binance and its CEO will have 21 days to respond once the service occurs. Failure to respond could result in a default judgment against them, granting the relief demanded in the complaint.
The SEC’s lawsuit against Binance, made public on June 5, included 13 charges against the cryptocurrency exchange. The majority of these allegations were related to unregistered sales of internal products and services, the cryptocurrency staking program, and the supposed failure to register Binance’s primary and U.S. arms as exchanges.
Binance has contested the SEC’s allegations and differentiated its business model from previous exchange failures, such as the collapse of FTX. In a statement responding to the SEC action, the company emphasized its distinction and denied claims of “siphoning consumers’ funds” or engaging in “collateralized borrowings.” Furthermore, Binance refuted allegations of making “large donations” to political candidates or providing significant sponsorships to entertainment and media entities.
As the legal proceedings unfold, the summons serves as an important development in the SEC’s case against Binance and CZ, signaling that the court expects their response within the designated timeframe.
