The U.S. Securities and Exchange Commission (SEC) has been pursuing allegations against Binance and its CEO Changpeng Zhao, accusing them of engaging in securities violations through entities such as Merit Peak Limited and Sigma Chain. Among the 13 charges brought against Binance in a June 2023 lawsuit were claims of operating unregistered exchanges and engaging in wash trading—artificially inflating trading volumes—a practice banned in traditional markets since 1933 but not yet regulated in crypto. The allegations highlight billions in customer assets being transferred, and instances of wash trading reportedly accounted for over 35% of certain trading volumes on specific days. As of 2026, there is a significant push for crypto market structure laws to regulate practices like wash trading, reflecting traditional market regulations and addressing longstanding gaps in the crypto industry.
Binance faces wash trading, fund mishandling allegations in SEC lawsuit
