Binance CEO Changpeng Zhao was issued a summons order by the United States district court in Washington, D.C. on June 7.
Binance CEO has 21 Days to Respond
As per the reports, Binance and its CEO will be given 21 days to reply once service is made. As the document reads:
“If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint.”
Even though Zhao is legally compelled to reply to the summons after it has been delivered, he won’t necessarily have to show up in person. In the summons, it was stated that: “A lawsuit has been filed against you.”
No Immediate Reaction
As the SEC and Binance did not immediately react after the news there is relatively not much information at this moment. However, the summons did not seem to have actually been marked as served.
SEC Sued Binance on June 5
The news comes just after the two days the Securities and Exchange Commission (SEC) hit the business with 13 charges on June 5, which were primarily related to unregistered sales of its internal products and services and improper registration of the company’s main and U.S. arms exchanges.
After the SEC made its claims, Binance responded, which demonstrates the firm’s protest over the situation. The firm said in a statement released as a reply to the lawsuit:
“We are different than ___,” which clearly implies that its method of doing business is not similar to other exchange’s breakdowns, such the FTX.
Lawsuit by CFTC
Binance’s difficulties began when a US government agency issued a warning for intentionally violating the law against the firm. The head of the Commodity Futures Trading Commission (CFTC) gave notice to Binance Holdings and its CEO Changpeng Zhao “CZ” for breaking American regulations.
Furthermore, Binance has recognised that cryptocurrency rules have made it difficult to conduct business in the US. It is presently looking for regulation in the UK as a result.