SEC examines Market Maker from Binance.Us who are connected to the founder of Binance

• The regulatory authority wants to establish the relationship between Binance.Us and two subsidiaries connected to Changpeng Zhao
• Several US authorities have examined Binance more than once for other compliance matters

The US Securities and Exchange Commission (SEC) examines two trading companies that are connected to the US arm of the Binance crypto tour. The financial market supervision is intended to investigate the relationship between Binance.Us and these companies that entertain the connections to the CEO and founder of Binance, Changpeng Zhao.

according to A test report published by Street Journal On Tuesday, Merit Peak Ltd and Sigma Chain AG are the companies in question. The two companies act on Binance.Us as Market Maker.

The WSJ stated that the unnamed sources said that the regulatory authority would like to obtain information on how the US subsidiary of the stock exchange informed customers about its relationship with the companies mentioned. In particular, a SEC examination does not necessarily lead to a enforcement measure.

crypto exchanges are only as strong as their market maker because they provide liquidity to the stock exchange. By buying and selling assets (regardless of market conditions), you increase stability on the stock exchanges. Such companies make profits from the marginal difference between money and mail courses.

On his website, Binance.Us are known that it allows connected market makers to act on the stock exchange, although it does not list certain names of such companies. The SEC is very interested in disclosures because it previously brought a lawsuit against companies that failed to reveal details about partners working on their platforms.

binance .us was founded in 2019 after the Mother Exchange Binance had difficulty finding its way around the regulatory weather in the United States. However, as the journal said, former managers were not quite sure where the funds came from with which the two companies were dealing with.

Zhaos relationships with the companies

Based on historical data, there are close relationships between Changpeng Zhao and the two companies. Information that comes from corporate documents and confirmed by former managers of the two companies show that the Binance founder had control over Merit Peak and Sigma Chain last year.

The stock exchange registered on the Kaiman Islands has committed itself to the highest compliance levels. Representatives of the stock exchange have also said that it is not necessary to make details of your public structure accessible to the public. However, it cooperates with inquiries from regulatory authorities to share information if this is required.

Binance had several disputes with supervisory authorities around the world in the first and especially second half of last year. In May, the Ministry of Justice and IRS examined the exchange for possible tax fraud and money laundering from investors. According to reports, the CTFC also examined the stock exchange in September for possible insider trade.