to continue trading on the international exchange could be the most damaging charge.īy questioning that the company has effectively kept Binance and Binance.US separate, the SEC is attacking the very structure of the business. Binance.US versus Īlthough all the charges could be viewed as serious, the claim that Binance and Zhao encouraged high net worth individuals in the U.S. They are misleading Binance.US customers about market surveillance controls to prevent manipulative trading on Binance.US.īinance Holdings, BAM Trading and Zhao were all mentioned by name in the SEC lawsuit.users from using rather than Binance.US. They are failing to restrict, and in some cases even encouraging, U.S.The exchanges are making unregistered offers and sales of BNB and BUSD, via crypto lending and staking-as-a-service programs.is operating as an unlicensed broker. ![]() and Binance.US are operating as unregistered exchanges and clearing agencies.On June 5, 2023, the SEC unveiled 13 separate charges against Binance and its founder, Zhao.Īmong other things, the SEC alleges that: U.S.-based customers were not supposed to be able to gain access to. regulatory guidelines without impinging on any programs offered by the international exchange,. Binance.US was supposed to be operated by both Binance and the separate U.S. As of this writing, BNB is the fourth largest cryptocurrency in the world by market capitalization.ĭue to regulatory pressure, Binance.US spun out of Binance in 2019 to facilitate U.S. Why Is the SEC Suing Binance?įounded in 2017 by Changpeng Zhao, commonly known as CZ, Binance quickly became the world’s largest cryptocurrency trading platform by volume.Ĭoinciding with the company’s launch, Binance also licensed the cryptocurrency Binance Coin (BNB) and released a stablecoin called Binance USD (BUSD). “Coinbase was fully aware of the applicability of the federal securities laws to its business activities, but deliberately refused to follow them,” Grewal said. Grewal, director of the SEC’s Division of Enforcement said in an SEC press release. “You simply can’t ignore the rules because you don’t like them or because you’d prefer different ones: the consequences for the investing public are far too great,” Gurbir S. The SEC’s suit alleges that since at least 2019 Coinbase has earned billions by allowing for the unlicensed buying and selling of “crypto asset securities,” particularly through its staking-as-a-service program, which the SEC charges Coinbase chose deliberately not to register, putting investors at risk. In one instance, Binance’s chief compliance officer even messaged a colleague to say that, “e are operating as a (vulgarity) unlicensed securities exchange in the USA bro.” Why Is the SEC Suing Coinbase?Ĭoinbase, a publicly traded company trading under the ticker COIN, was founded in 2012. With regard to Binance, the SEC has detailed a laundry list of allegations against both the company and its founder, many of which could hold serious consequences for the individuals named. ![]() ![]() ![]() The suit against Coinbase appears to be a difference in opinion between the SEC and Coinbase about whether most cryptocurrencies are securities. There are important differences between the two lawsuits. The SEC also alleges that Binance and Binance.US commingled billions of dollars worth of user funds-similar to activities that helped bring down FTX-and sent them to a European company controlled by Zhao. are barred from using, and the SEC alleges that Binance and Zhao violated securities laws by allowing U.S. They arrive just one day after the SEC filed charges against Binance and its founder, Changpeng Zhao.īinance and Coinbase are the two largest crypto exchanges in the world by market cap.īinance operates internationally as and in the U.S. Securities and Exchange Commission (SEC) unveiled charges against crypto exchange Coinbase.
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