The SEC Investigates Crypto Platform Binance

by in Cryptocurrency News

SEC investigates Binance

The US SEC started an investigation of the crypto company Binance and two other trading platforms; Merit Peak Ltd and Sigma Chain AG. The two function as market makers that purchase and sell cryptos to Binance US to reduce price volatility.

Related: Binance to launch crypto exchange in Thailand

According to a report by Wall Street Journal, the agency is concerned about the way Binance reveals its connection to the two trading films. Binance.US website mentions that market makers can trade on the platform. However, there is no information about specific companies.

The WSJ says that the SEC asked Binance for more details about the firms. According to the report, corporate papers from 2019 reveal a connection between Binance CEO Changpeng Zhao and the two firms. It was also reported that CZ started leading both companies the previous year.

How the investigation will proceed is unclear. In May 2021, the Department of Justice and Internal Revenue Service started an investigation against Binance to find out whether the company is engaged in implementing illicit transactions. Binance is the leading crypto exchange by trading value.