SEC’s Binance Lawsuit Strikes at Heart of Ailing Crypto Sector

The US Securities and Exchange Commission’s lawsuit against crypto exchange Binance and its head Changpeng Zhao injects fresh uncertainty into a sector that’s struggling to maintain mainstream relevance.

The SEC accused Binance Holdings Ltd. and Zhao of mishandling customer funds, misleading investors and regulators, and breaking securities rules. The action adds to the regulatory heat on the largest digital-asset trading platform. It’s also another black eye for crypto after a rout in 2022 that contributed to rival FTX’s downfall amid a flurry of fraud allegations.

The market faces an uphill task to restore trust and, meanwhile, investors are moving ...