SEC: Binance bought a luxury yacht with their customers' money

The U.S. Securities and Exchange Commission accuses Binance and its founder Changpeng Zhao of deliberately making the company's network opaque.

In the indictment against Binance, the SEC accuses the crypto exchange of illegally handling its customers' money. According to the indictment, portions of Binance funds flowed through a non-transparent corporate network to purchase a yacht worth US$11 million.

In 2021, "at least $145 million was transferred from BAM Trading to a Sigma Chain account." Another US$45 million was also allegedly transferred from the account of a trust company of BAM Trading to Sigma Chain. From this account "the company spent US$11 million on the purchase of a yacht," according to the SEC.

"In the absence of regulatory oversight, the defendants could and did transfer investors' crypto and cash balances at will.", let the SEC know.

It further reveals, "For example, through accounts owned and controlled by Zhao and Binance, billions of US dollars in customer funds were pooled from both Binance platforms to an account owned by a company controlled by Zhao (called Merit Peak Limited). Whereby these funds were then transferred to a third party".

Zhao allegedly founded a number of other companies

In addition to "Merit Peak" and "Sigma Chain," Zhao allegedly created a number of other companies around the crypto platform, the SEC alleges. Although these are legally separate from the American spin-off Binance.US, Zhao ultimately has operational control of all the companies.

According to the SEC, "tens of billions of dollars" were transferred to BAM Trading, Binance and affiliates through the accounts of Merit Peak and Sigma Chain.