The U.S. securities watchdog has launched a probe into crypto exchange Binance’s relationship with two trading firms with ties to founder Changpeng Zhao, the Wall Street Journal reported.

Fast facts

  • The Securities and Exchange Commission (SEC) is examining whether Binance’s U.S. arm properly discloses to users its links to two trading firms — Sigma Chain AG and Merit Peak Ltd. — which serve as market makers that trade on Binance US.
  • The WSJ cited former Binance executives in reporting Zhao controlled the two entities as of late last year.
  • Binance is currently dealing with regulatory hurdles in numerous regions without operating from a physical global headquarters.