SEC opens probe into links between Binance.US and companies owned by CEO Changpeng Zhao

The SEC has opened an investigation into two crypto trading companies owned by Binance CEO Changpeng Zhao.

Sigma Chain AG and Merit Peak Ltd., perform cryptocurrency market-making activities on Binance's American subsidiary, Binance.US.

According to a WSJ report, former employees of Binance have confrmed that Zhao is in control of the companies.

The SEC probe is mainly focused on determining if the two entities controld by Zhao are receiving an unfair advantage compared to other traders on the exchange.

Unnamed sources revealed to the WSJ that the SEC has demanded information on what disclosures Binance.US has made to its clients. was launched in 2019 after U.S. authorities instructed Binance to stop serving American clients. While in 2021 the CFTC opened an investigation into to determine if illegal derivatives trading was being conducted on the exchange.