(The Center Square) – The U.S. Securities and Exchange Commission sued Binance, the largest cryptocurrency asset trading platform in the world, for allegedly misusing customer money and operating an illegal exchange.

The lawsuit filed Monday named Binance Holdings Ltd., Binance.com; U.S.-based affiliate, BAM Trading Services Inc., which, together with Binance, operates the crypto asset trading platform, Binance.US; and founder Changpeng Zhao.

The suit accuses Zhao and Binance of lying when they claimed that Binance.US was created as a separate, independent trading platform for U.S. investors when in reality Zhao and Binance secretly controlled the platform’s operations.

"We allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law," SEC Chair Gary Gensler said in a statement. "As alleged, Zhao and Binance misled investors about their risk controls and corrupted trading volumes while actively concealing who was operating the platform, the manipulative trading of its affiliated market maker, and even where and with whom investor funds and crypto assets were custodied."

Gensler also said they "attempted to evade U.S. securities laws by announcing sham controls that they disregarded behind the scenes so that they could keep high-value U.S. customers on their platforms."

Binance said it was caught in the middle of "a U.S. regulatory tug-of-war."

"We are disappointed that the U.S. Securities and Exchange Commission chose to file a complaint today against Binance seeking, among other remedies, purported emergency relief," according to a statement from the company. "From the start, we have actively cooperated with the SEC's investigations and have worked hard to answer their questions and address their concerns."

The company said it had been working with the SEC "to reach a negotiated settlement to resolve their investigations."

Zhao said, "Our team is all standing by, ensuring systems are stable, including withdrawals, and deposits," in a tweet Monday. 

In later tweets and retweets throughout the day, Zhao was critical of Gensler and the SEC.

The company also said customer assets were safe. 

"Any allegations that user assets on the Binance.US platform have ever been at risk are simply wrong," the statement said. "All user assets on Binance and Binance affiliate platforms, including Binance.US, are safe and secure, and we will vigorously defend against any allegations to the contrary."