Securities and Exchange Commission Challenges Binance’s Operations
Binance, the world’s largest cryptocurrency exchange, is now facing legal action from federal regulators, alleging that it operated an unlawful exchange within the United States and commingled billions of dollars’ worth of customer funds.
The Securities and Exchange Commission (SEC), the primary regulatory body for Wall Street, accuses Binance of willfully ignoring US securities laws. The lawsuit also names Binance’s CEO, Changpeng Zhao (CZ), as a defendant.
In a statement on Monday, SEC Chair Gary Gensler said, “Through 13 charges, 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.”(source)
The SEC claims that Zhao and Binance combined customer assets and redirected a portion to an entity under Zhao’s control. The complaint suggests that both parties were aware of violating US laws.
“Binance’s CCO bluntly admitted to another Binance compliance officer in December 2018, ‘we are operating as an unlicensed securities exchange in the USA bro,’” the complaint reads, referring to the company’s chief compliance officer.
Binance’s spokesperson expressed the company’s serious consideration of the SEC’s allegations, maintaining their belief that the accusations are unfounded.(source)
In addition, CZ tweeted his number 4, his shorthand for “Ignore FUD, fake news, attacks, etc.”
He also retweeted posts, including one from Justin Sun of Huobi Global:
And a retweet on Charles Hoskinson, reiterating Binance’s stance on how the SEC is diminishing the US’ ability to become a hub for innovation and blockchain technology:
“With respect to Binance, I’m reading through the SEC complaint. It’s over 130 pages, but seems like the next in a series of steps to implement chokepoint 2.0 in the United States. The end goal is an agenda based CBDC partnered with a handful of massive banks and end-to-end control over every aspect of your financial life.
A regulatory event is where you have a debate about compliance with a law or guidance. This event seems to be a political philosophical disagreement with the very existence of cryptocurrencies and what they represent. An unelected group of people have decided that concepts like self-sovereign identity, owning your wallet, and the freedom to control your economic agency should be removed from the masses and given to the “enlightened” few.
Honestly, what is happening isn’t anything new. It’s always the same fight between freedom and authoritarianism just with different players, technology, and words. It does seem like this event is a perfect opportunity for the entire industry to set aside its fragmented nature and unite for a common sense set of rules and guidelines that can prevent the United States from slipping into a dystopia that would make 1984 look like a vacation.
I’ll have more to say later, but will close with we are going to be fine. Everything’s alright and the future is bright for the industry.”
The impact of a potential shutdown of Binance’s US operations is considered irrelevant by Arca CEO Jeff Dorman. He expects negative market sentiment but anticipates support for CZ and Binance within the crypto community.
As a result, Bitcoin’s price has fallen more than 5%, currently trading around $25,600 at the time of writing.
As the FUD intensifies, with upcoming CPI data and the next FOMC meeting, Bitcoin’s fate remains uncertain. The crypto community awaits developments in this ongoing situation.
Will Bitcoin weather the storm or succumb to the pressure? Only time will tell.
