On June 7, the United States district court in Washington, D.C., issued a summons for Binance CEO Changpeng Zhao in response to the Securities and Exchange Commission’s (SEC) recent complaint accusing Binance of conducting unregistered securities operations.
Just two days after the SEC took legal action, a summons was sent to Zhao informing him of the case that had been brought against him and the exchange.
Changpeng Zhao, the CEO of Binance, is not needed to personally present, but after the summons has been properly served, he is compelled by law to respond to it. The agreement states that Binance and Zhao will have 21 days after the service is finished to respond.
The summons, which was initially published on Eleanor Terrett’s Twitter, cautions that failing to answer within the specified period might lead to a default judgment being made against them, giving the remedy demanded in the case.
Binance CEO Changpeng Zhao, popularly known as CZ, is presently residing in Malta, a Mediterranean island country, according to the summons.
Following this revelation, CZ immediately posted on Twitter to reassure supporters that this move was “nothing new” and that there was “no need to FUD.”
These steps were taken shortly after the U.S. Securities and Exchange Commission (SEC) sued Binance on June 5.
The commission charged Binance with participating in the offering of unregistered securities. The SEC attacked Coinbase, one of the top Bitcoin exchanges, for identical reasons shortly after Binance was sued.
Several well-known cryptocurrencies supplied by Coinbase, including Solana (SOL), Polygon (MATIC), and The Sandbox (SAND), are alleged by the commission to fit the requirements for being classified as securities. The most recent development in this matter is the summons.
Changpeng Zhao, the CEO of Binance, was recently ordered by a court to appear in court, which is a sign of the increased regulatory scrutiny surrounding the swiftly growing cryptocurrency business.
Market players and analysts are intently observing Zhao’s response to this event and any potential repercussions for the entire crypto market.
Although so far, the SEC’s actions against Coinbase and Binance have only served to strengthen the community’s bonds, notable community members like Kristen Smith, CEO of the Blockchain Association, have stated that while the SEC’s actions are expected, they are still unacceptable, and many others have agreed with her.