Binance CEO Summoned By U.S. District Court

Binance CEO Summoned By U.S. District Court

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. 
  • 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. 

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