Binance CEO Changpeng Zhao (CZ) has been issued a summons by the U.S. District Court for the District of Columbia following a lawsuit against himself and his exchange on Monday.
The CEO must respond to the summons within 21 days, but is not required to appear in person.
- Other entities named in the lawsuit, including Binance and Binance US, must also answer the summons.
- “If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint,” read the filing.
- Per the Security and Exchange Commission (SEC)s 136-page filing against Binance on Monday, the commission wants the exchange to “disgorge their ill-gotten gains with prejudgment interest,” and to permanently enjoin the firm from engaging in the crypto and securities trading business.
- The lawsuit charged Binance with selling unregistered securities in the forms of BNB and BUSD, as well as operating as an unregistered securities exchange and broker-dealer within the United States.
- It also accused the firm of not retaining independence from Binance US, commingling billions of dollars in funds from both firms within Merit Peak – an entity controlled by CZ.
- The CEO was not phased by the summons on Wednesday, viewing it as a procedural aspect of the lawsuit.
I was told this is just part of the SEC compliant process. Nothing new.
Also told I won't have to appear in person. No need to FUD. pic.twitter.com/NYUlBCIirG
— CZ Binance (@cz_binance) June 7, 2023
- Binance US was issued a restraining order to have its assets frozen by the SEC on Tuesday, pending court approval. The order does not affect the international exchange.