Binance CEO summoned by US District Court over SEC action.
On June 7th, the United States District Court in Washington, D.C. summoned Binance CEO Changpeng Zhao, just two days after the Securities and Exchange Commission (SEC) sued the exchange for allegedly conducting unregistered securities operations.
The summons read, “A lawsuit has been filed against you.”
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 case. 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
Although details are currently limited, the summons, viewed by Cointelegraph, did not appear to have been marked as served. The SEC and Binance did not immediately respond to requests for information.
Changpeng Zhao, the CEO, is not required to appear in person, but he must respond to the summons once it is served, according to the document.
Once service is completed, 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 document states.
The SEC’s lawsuit against Binance, which was made public on June 5th, includes 13 charges against the cryptocurrency exchange, the majority of which relate 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 blockchain for breaking US securities rules
Binance denies the SEC’s allegations. In a statement responding to the SEC’s action, the company stated that “we are different than ___,” implying that its business model was not comparable to previous exchange failures, such as the FTX collapse.
As recently reported by Cointelegraph, Binance denies that its exchange ever “siphoned consumers’ funds” or “collateralized borrowings.” The company also claims that it never made “large donations” to political candidates or provided “large sponsorships” to entertainment and media entities.