Failure to register as broker-dealer. The SEC alleges violation of Section 15(a) of the Exchange Act (15 U.S.C. § 78o(a)) for the facilitation or inducement of the purchase or sale of securities without registering as a broker and without an exemption from such registration. Specifically, the SEC alleges that defendants operated as broker-dealers by unlawfully soliciting US investors to buy, sell, and trade crypto-asset securities through unregistered trading platforms available online at Binance.com and Binance.US (collectively, Binance platforms).

Failure to register as national securities exchange. The SEC alleges violation of Section 5 of the Securities and Exchange Act of 1934, as amended (Exchange Act) (15 U.S.C. § 78e) for the use of an exchange to effect transactions in a security without registering as a national securities exchange under Section 6 of the Exchange Act absent an exemption from such registration. Specifically, the SEC alleges that defendants provided a marketplace to effect securities transactions – the Binance platforms – that customers accessed via the Binance.com website, a Binance mobile phone application, or a Binance-created programming interface application.

Failure to register as clearing agency. The SEC alleges violation of Section 17A(b) of the Exchange Act (15 U.S.C. § 78q-1(b)) for performing the functions of a clearing agency with respect to securities without registering in accordance with Section 17A(b) of the Exchange Act absent an exemption or exclusion from such registration. Specifically, the SEC alleges that the Binance platforms served as an intermediary in settling transactions in crypto-asset securities occurring on these platforms. The SEC alleges that these platforms also each acted as a custodian of securities by requiring customers to deposit their crypto-asset securities in wallets controlled by Binance Holdings Ltd. (Binance) and BAM Trading Services Inc. (BAM Trading) and creating a system for the central handling of securities under which crypto-asset securities deposited, held, traded, or accrued on the Binance platforms were treated as fungible and customer accounts were debited and credited by Binance and BAM Trading to settle customer transactions.

Unregistered offer and sale of crypto-asset securities. The SEC alleges violation of Sections 5(a) and 5(c) of the Securities Act of 1933, as amended (Securities Act) (15 U.S.C. §§ 77e(a) and 77e(c)) for the unlawful offer and sale of securities by effecting unregistered crypto-asset securities transactions on the Binance platforms, including offers and sales of Binance’s own crypto assets, called BNB and BUSD, Binance’s profit-generating programs called "BNB Vault" and "Simple Earn," and the offer and sale of BAM Trading’s staking-as-a-service program.

Fraud and failure to prevent manipulative trading. The SEC alleges violation of Section 17(a)(2) and (3) of the Securities Act (15 U.S.C. §§ 77q(a)(2) and 77q(a)(3)) for obtaining money or property by means of materially false and misleading statements. The complaint alleges that BAM Trading and BAM Management US Holdings Inc. (BAM Management) engaged in acts of fraud or deceit upon Binance.US customers and equity investors in BAM Management relating to failure to implement controls to prevent manipulative trading on the Binance.US platform.

Falsely claimed the operation of the Binance.US platform was independently controlled. However, Zhao and Binance participated in directing BAM Trading’s US business operations and providing and maintaining the crypto-asset services on the Binance.US platform.

Consistently claimed that the Binance.com platform did not serve US persons. However, Zhao directed Binance to assist certain high-value US customers in circumventing controls launched in 2019 to block US customers from the Binance.com platform.

Transfer investors’ crypto and fiat assets as they wished.

Commingle and divert investors' assets, for example, through accounts owned and controlled by Zhao and Binance. The complaint alleges that billions in customer funds were commingled among the Binance platforms in an account held by a Zhao-controlled entity, Merit Peak Limited, and the funds were subsequently transferred to a third party in connection with the purchase and sale of crypto assets.

Freezing the assets of BAM Management and BAM Trading.

Directing defendants to repatriate assets held for the benefit of customers of the Binance.US platform.

Directing defendants to provide the SEC with a sworn accounting.

Prohibiting the destruction of relevant documents or tangible things.

Repatriating BAM Trading’s assets deposited overseas.

Requiring defendants to show cause why a preliminary injunction should not be entered.

Requiring expedited depositions, written discovery, and document productions in the 14-day period between entry of the temporary restraining order relating to the injunctive relief requested in the complaint and the hearing on that relief.

Authorizing alternative means of service on defendants Zhao and Binance because they are known for their disagreement with the premise of a headquarters or domicile and consequently have failed to identify one, and Zhao's whereabouts are often unknown.