SEC sues Binance
By 
Today is the 89th anniversary of the founding of the Securities and Exchange Commission, which is one of those oppressive government regulators that the whole cryptocurrency industry was supposed to make obsolete. Unfortunately for the world’s biggest crypto exchange, this date may also live in infamy as D(fault)-Day:
The Securities and Exchange Commission on Monday accused Binance, the world’s largest cryptocurrency exchange, of mishandling customer funds and lying to American regulators and investors about its operations, in a sweeping case that has the potential to remake the landscape of power and wealth within crypto.
The S.E.C.’s lawsuit was the second time this year that federal regulators have accused Binance of evading laws designed to protect investors in the United States. Regulators have long seen the exchange, which has said it does $65 billion in average daily trading volume, as a major target in their quest to bring to heel a crypto industry that has been built around an explicitly anti-government ethos.
In the 136-page complaint, the S.E.C. said Binance had mixed billions of dollars in customer funds and secretly sent them to a separate company, Merit Peak Limited, which is controlled by Binance’s founder, Changpeng Zhao.
The complaint also said Binance had misled investors about the adequacy of its systems to detect and control manipulative trading and about its efforts to restrict U.S. users from trading on its international platform. U.S.-based customers were supposed to have access only to an ostensibly separate company formed specifically to operate within the United States, called Binance.US.
Binance and Mr. Zhao “enriched themselves by billions of U.S. dollars while placing investors’ assets at significant risk,” regulators said in the civil lawsuit, which was filed in Federal District Court in Washington.
No one has ever been able to explain to me why crypto is anything other than a Ponzi scheme, and not a particularly sophisticated one either.