Crypto prices suffer as SEC sues Binance and CEO Changpeng Zhao

The U.S. Securities and Exchange Commission sued cryptocurrency exchange Binance Holdings and its CEO Changpeng Zhao for allegedly violating U.S. securities regulations , according to a filing dated Monday. The move further roiled crypto prices, with bitcoin ( BTC-USD ) down 2.6% to $26.48K and binance coin ( BNB-USD ) off 6.6% to $286.29 as of shortly before 12:00 p.m. ET. Ethereum ( ETH-USD ) also extended losses to new intraday lows, retreating 2.4% to $1.85K. The Wall Street regulator alleged that Binance mishandled customer funds and secretly sent them to a separate entity controlled by Zhao. 13 charges were filed against Binance and CZ, as he is known, including deceiving investors about the sufficiency of its systems to detect and control manipulative trading. The SEC also accused the platform of taking insufficient steps to prohibit U.S. investors from accessing its unregulated exchange. “As alleged, Zhao and Binance misled investors about their risk controls and corrupted trading volumes while actively concealing who was operating the platform, the manipulative trading of its affiliated market maker, and even where and with whom investor funds and crypto assets were custodied," said SEC Chair Gary Gensler. "They attempted to evade U.S. securities laws by announcing sham controls that they disregarded behind the scenes so that they could keep high-value U.S. customers on their platforms," he added. Binance did not immediately respond to Seeking Alpha's request for comment. This marks the second high-profile suit against Binance and Zhao since the end of March, when the Commodity and Futures Trade Commission accused the platform of breaching certain trading and derivatives rules. In 2019 and 2020, Binance controlled five bank accounts belonging to its independent U.S. affiliate, Binance.US, including one that held U.S. customers' money, Reuters reported had reported , citing bank records. That's a cause for concern as Binance does not have authority to operate in the U.S. More on the Crypto Market Bitcoin: Liquidity Suggests A Price Drop Is Coming Binance: Could CFTC Lead To Bigger Problems? Crypto giant Binance said to lay off non-performers as market share wanes Binance commingled customer funds with its revenue in 2020, 2021 - report Binance to exit Canada due to stiffer rules on stablecoins, crypto exchanges