As was Binance’s announcement last summer that it would establish a global headquarters and a transparent, professional management structure.īut perhaps these were all well-strategized moves to counter potential earlier missteps in this game of regulatory chess. Yet the exchange’s move late last year to set up a recovery fund for distressed crypto assets - quibbles over its size aside - was an admirable gesture that appeared to signal a new determination on its part to get on the right side of things. Whether the CFTC’s allegations hold up or not, Binance has a colorful history when it comes to regulation and compliance. Coinbase is apoplectic, and its frustration is summed up simply in a tweet posted by its chief legal officer, Paul Grewal, who said: “After years of asking for reasonable crypto rules, we’re disappointed that the SEC is considering courts over constructive dialogue.”īinance’s call for regulatory clarity is unassailable, as is Coinbase’s, and it’s representative of a view shared across the rest of the crypto industry as it struggles to emerge from the shadow of last year’s traumatic busts and blowouts. agency, the Securities and Exchange Commission, filed a Wells notice to crypto exchange Coinbase, signaling that enforcement action is coming. And when it comes to finance in the home of the world’s deepest and most liquid capital markets, things don’t get much more crystal than the rules and regulations.Īnd as it happens, this comes in the same week that another U.S. But in arguably the world’s most litigious country, the law must be nothing if not clear. Commodity Futures and Trading Commission has brought against Binance and its co-founder, Changpeng “CZ” Zhao, over alleged breaches of the Commodity Exchange Act and CFTC regulations, the company called for the development of a “clear, thoughtful regulatory regime.” In a statement responding to the lawsuit the U.S. Yet that’s just what Binance’s communications folks have done following the news that the world’s biggest cryptocurrency exchange is being sued for allegedly breaking U.S. His criminal trial is likely to be in the fall.It’s a rare thing when corporate spokespeople say much that could be considered interesting, let alone revealing. prosecutors and the SEC charged FTX’s founder Sam Bankman-Fried with a host of money laundering, fraud and securities fraud charges in December. The lawsuit comes roughly eight months after the collapse of FTX, which was also accused of co-mingling customers’ funds and investing the proceeds in high-risk investments that customers were unaware they were participating in. “Unfortunately, the SEC’s refusal to productively engage with us is just another example of the Commission’s misguided and conscious refusal to provide much-needed clarity and guidance to the digital asset industry.” We intend to defend our platform vigorously,” the company said in a Twitter post. “While we take the SEC’s allegations seriously, they should not be the subject of an SEC enforcement action, let alone on an emergency basis. In a social media post, Binance said that it has been cooperating with the SEC’s investigation but said that the agency “chose to act unilaterally and litigate.” “The public should beware of investing any of their hard-earned assets with or on these unlawful platforms,” Gensler said. SEC Chair Gary Gensler in a written statement that Zhao and Binance “engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law.” The lawsuit lays out the extent to which the firms owners knew of the alleged legal violations: “Binance’s CCO bluntly admitted to another Binance compliance officer in December 2018, “we are operating as a fking unlicensed securities exchange in the USA bro.” District Court for the District of Columbia, the Securities and Exchange Commission lawsuit on Monday lists thirteen charges against the firm - including commingling and divert customer assets to an entity Zhao owned called Sigma Chain.īinance is a Cayman Islands limited liability company founded by Zhao and the charges are familiar to practices uncovered after the collapse of the second largest cryptocurrency exchange, FTX, last year. securities laws in a lawsuit filed by the SEC.įiled in the U.S. WASHINGTON (AP) - The world’s largest cryptocurrency exchange Binance and its founder Changpeng Zhao are accused of misusing investor funds, operating as an unregistered exchange and violating a slew of U.S.
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