The United States District Court in Washington, D.C. has issued a summons for Binance CEO, Changpeng Zhao, also known as CZ. The summons follows closely on the heels of the Securities and Exchange Commission’s (SEC) lawsuit filed against the popular cryptocurrency exchange.
A Legal Notice Served
The summons, dated June 7, is a legal notice to CZ, currently believed to reside in the Mediterranean island nation of Malta. It states, “A lawsuit has been filed against you.” At the time of writing, the summons did not appear to have been officially served, and neither the SEC nor Binance has offered any immediate response or additional information.
The CEO isn’t necessarily required to appear in person. However, once the summons is served, CZ and Binance have a legal obligation to respond within 21 days. The document warns, “If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint.”
Charges Stemming from SEC Lawsuit
The SEC lawsuit against Binance was made public on June 5, levying a total of 13 charges against the cryptocurrency exchange. The allegations mostly relate to unregistered sales of Binance’s internal products and services, including its cryptocurrency staking program, and its purported failure to adequately register its primary and U.S. arms as exchanges.
In response to the SEC’s action, Binance has disputed the allegations. In a public statement, the company maintained that their business model was fundamentally different from other failed exchanges, referencing the FTX collapse without explicitly naming it. The company said, “We are different than ___.”
Binance Denies Any Misconduct
Binance has vehemently denied all allegations of misconduct. The company has refuted claims that it “siphoned consumers’ funds” or used them to “collateralize borrowings.” It also rejected the idea that it gave “large donations” to political candidates or made significant “sponsorships” to entertainment and media entities. As the situation unfolds, the global crypto community awaits further clarity from the court proceedings and Binance’s official response to the summons.
