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U.S. regulator investigates Binance founder Changpeng Zhao

U.S. regulator investigates Binance founder Changpeng Zhao

The U.S. Securities and Exchange Commission (SEC) investigates the connection between Binance.US and two trading companies. It is suspected that the companies benefited from a competitive advantage by receiving incentives from the exchange, such as increased access and faster service speed. 

According to the Wall Street Journal, corporate documents dated from 2019, as well as former executives of the suspected companies, confirm that back in December 2021, Changpeng Zhao controlled both firms. 

Sigma Chain AG and Merit Peak Ltd are traders on the Binance exchange, involved in buying and selling digital assets to generate profits. Providing a competitive advantage could significantly increase their profits. Since this violates U.S. laws, the SEC is investigating these companies, along with sending a request to Binance.US for more information. 

Recall that Binance was already exposed to increased supervision by financial regulators last year. Meanwhile, an investigation by Reuters revealed that cryptocurrency exchange Binance hid information from its partners and government regulators


Binance is the world's largest cryptocurrency exchange in terms of trading volume (about $2 billion daily). It was founded in 2017 by Changpeng Zhao, and in a couple of years, it has grown into an entire blockchain ecosystem representing the whole spectrum of cryptocurrency products and services. These include a decentralized exchange (Binance DEX), a public blockchain with fast execution (Binance Chain) with an add-on for smart contracts and Ethereum support (Binance Smart Chain), an infrastructure development fund (Binance Labs), an information website (Binance Info), a training center (Binance Academy), a research center (Binance Research), and a nonprofit organization for achieving sustainable development goals (Binance Charity Foundation).       

Trading volume: $27.9 billion.

Number of trading pairs (markets): 1643

Legal status: registered in the Cayman Islands

Fiat currencies: over 43 (including USD, EUR, CAD)

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