Binance and Zhao allegedly undermined the company's own compliance, courted U.S. investors and traded against its customers using market-making companies.

Most major cryptocurrencies extended a decline on Wednesday, after the U.S. Securities and Exchange Commission sued both crypto exchanges Binance

The top U.S. securities regulator sued cryptocurrency platform Coinbase on Tuesday, the second lawsuit in two days against a major crypto exchange, in a dramatic escalation of a crackdown on the industry and one that could dramatically transform a market that has largely operated outside regulation.

The U.S. Securities and Exchange Commission on Tuesday sued Coinbase, accusing the largest U.S. cryptocurrency platform of operating illegally because it failed to register as an exchange, in another blow to the crypto industry.

The move against Binance and Coinbase is the latest in a string of enforcement actions the SEC has brought against crypto companies since FTX imploded.