There appears to be no end to Binance skirmishes with regulators around the world, as reports have emerged that the United States Securities and Exchange Commission is currently investigating its US arm based on ChangPeng Zhao’s connection with trading firms.
Binance US under SEC investigation
According to a Wall Street Journal report, the SEC is investigating the relationship between CZ and two trading firms, Sigma Chain AG and Merit Peak. The investigation, however, does not necessarily mean that there is any wrongdoing on the part of the firms or CZ.
While there is little to no public information about Merit Peak, Sigma Chain, on the other hand, is located in Switzerland.
WSJ sources stated that Zhao controlled both firms until last year when Chen Guangying became the president of Sigma Chain. A look at some of Binance’s corporate documents will reveal that Guangying has been listed as an executive director.
Per the report, the two trading firms act as market makers for Binance US. Market makers, in simple terms, bring liquidity to exchanges as they usually trade digital assets from crypto exchanges and help reduce price volatility.
The main concern of the investigation is to ascertain if Binance.US gives preferential treatment to these firms and if it properly disclosed its ties to the firms to its customers.
Though the US arm of Binance has faced less regulatory scrutiny in comparison to its parent company, it is important to note that the firm was investigated by the Commodity Futures Trading Commission (CFTC) last year for possible insider trading and market manipulation.
Binance smart chain becomes BNB chain
In an unrelated development, Binance has revealed that it is renaming its Binance Smart Chain to BNB chain to help facilitate more opportunities and provide additional freedom for innovations.
According to the press statement issued by the exchange, the new BNB chain will be more decentralized as its validators would increase to 41. Apart from that, the new ecosystem would also allow large-scale applications within the SocialFi, GameFi, and Metaverse space to be built on it.
“BNB and its networks Binance Chain and Binance Smart Chain form the new BNB Chain ecosystem built around this outstanding utility token.”
#BNB stands for:
Build the community, aNd let the community Build.
Build’N Build. https://t.co/1QuK5rLxM6
Binance (@cz_binance) February 9, 2021
Notably, just last week, CZ revealed that the meaning of BNB is actually “Build’N Build,” meaning to “Build the community, aNd let the community Build.”
It was added that the BNB chain would continue the current Binance smart chain works on incubation Program, community-driven events and workshops, and other initiatives.
Binance US reportedly under SEC radar CryptoSlate.