- According to the lawsuit filed by the SEC, Binance CEO Changpeng Zhao has been summoned to Malta.
- The SEC alleges that the exchange engaged in suspicious activities in Malta between 2018 and 2019.
- Binance came to Malta in March 2018, and in the same year, Malta passed a law allowing crypto companies to apply for licenses to operate there.
Following the SEC lawsuit, Binance CEO Changpeng Zhao was summoned to Malta. CEO Zhao clarified the situation.
CZ Summoned to Malta in Light of SEC Lawsuit
Binance CEO Changpeng Zhao has been summoned to Malta in light of the lawsuit filed by the US Securities and Exchange Commission (SEC) alleging that the exchange engaged in suspicious activities in Malta between 2018 and 2019.
Zhao clarified the situation, stating that he did not need to appear in person to respond to the summons:
“I was told that this is just part of the SEC compliance process. There is nothing new. Also, I was told that I don’t need to appear in person. There is no need to create fear.”
The SEC filed the summons with the US District Court for the District of Columbia on Wednesday. However, this is just a normal part of the process and does not indicate any special circumstances.
Earlier this week, the SEC filed a lawsuit against Binance alleging 13 different charges related to misleading investors, operating as an unregistered broker/trader, and more. Binance came to Malta in March 2018, and in the same year, Malta passed a law allowing crypto companies to apply for licenses to operate there.
Binance operated in Malta from October 2018 to October 2019. During this time, crypto companies that moved to Malta had one year to apply for authorization and comply with regulations. Binance and others were not required to apply for authorization or comply with anti-money laundering laws during this period.
The SEC’s latest court filing highlights Binance’s preference for weak regulations in Malta. Malta had marketed itself as a blockchain-friendly location. The upcoming lawsuit will shed light on Binance’s suspicious activities in Malta, particularly with regard to US investors and institutions.
Binance’s Partnership with Signature Bank
The SEC’s new filing on Wednesday shows that Binance conducted nearly $70 billion in transactions through bankrupt Silvergate Bank and Signature Bank from 2019 to early this year.
The filing shows that Silvergate Bank processed over $50 billion for Binance and its affiliates, while Signature Bank processed over $19 billion. The SEC filing, which references records of Binance’s bank accounts, deposits, wire transfers, and cancelled checks, shows that some of the funds were also transferred to foreign entities.
The filing states: “In some months, the amounts credited and debited are in the billions of dollars. For example, in July 2021, a Signature Bank Binance Holdings account showed an opening balance of $468 million, deposits of $1 billion, withdrawals of $1.3 billion, and an ending balance of $179 million.
