The U.S. Securities and Exchange Commission (SEC) formally filed a lawsuit last night against cryptocurrency exchange Binance and its CEO Changpeng Zhao (CZ)
Binance, under the leadership of CZ, provides three core services for securities: exchange, broker-dealer, and clearing. Binance was aware that conducting these operations required registration under U.S. law, but chose not to register in order to escape regulation. (The key is that it won’t be given to you even after you register! It’s all just a routine,)
Binance and BAM Trading illegally offer and sell unregistered securities, including BNB Vault, Staking, and Simple Earn. Users do not have full access to actual information, including potential risks.
Binance and BAM Trading made false statements about Binance US. This resulted in approximately $200 million in investment and billions of dollars in transaction volume.
The SEC believes that despite the establishment of the Binance US site in 2019, Binance has been claiming that the main Binance site does not serve U.S. users and has taken relevant measures to avoid it.
But in actual actions, CZ instructed Binance to secretly help certain [high-net-worth users] escape the restrictions.
This approach puts billions of U.S. investor funds at risk, directly controlled by Binance and CZ.
At least one thing that can be determined is that Sigma Chain AG controlled by CZ engaged in false transactions on Binance from 2019 to 2022, exaggerating the trading volume of Binance US.
Pursuant to the Securities Act and the Exchange Act, CZ and the above-mentioned companies violated:
Offering and selling unregistered securities
Affecting transactions in unregistered securities on the Binance platform
Combining core securities market functions and deliberately evading registration
A clear violation of the conflict of interest principle
Summary: It is still a civil lawsuit in nature. The worst case scenario is to shut down Binance US. The main Binance site will completely withdraw from the US market and be fined.
SEC swings the knife again! After suing Binance and its CEO CZ late last night, the U.S. Securities and Exchange Commission once again sued Coinbase for violating securities laws this evening.
Coinbase is accused of providing trading, brokerage and clearing operations for unregistered securities, charging fees for staking services. The SEC alleges that since at least 2019, Coinbase has illegally traded billions of dollars in cryptocurrency "securities" and allowed customers to earn rewards in securities products.
SEC Chairman Gary Gensler said in the announcement:
Although Coinbase is subject to securities laws, the exchange blends and provides stock exchange, brokerage, and clearing functions, which should be kept separate in securities markets. Coinbase’s negligence deprived investors of important protections, including rules to prevent fraud and market manipulation, safeguards to prevent conflicts of interest, and routine inspections by the SEC.
According to the prosecution filing, the SEC defined crypto tokens such as SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH and NEXO as securities in the Coinbase case.
As a result of the news of the lawsuit, Coinbase's stock price fell 16% before the market opened, temporarily trading at $47.06.
In addition, what has attracted the attention of many investors is that the SEC mentioned in the lawsuit against Binance that the cryptocurrencies listed as securities include but are not limited to BNB and BUSD, and also include the following popular cryptocurrencies: SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS and COTI; in other words, the SEC has currently classified the above-mentioned tokens with a market value of more than US$115 billion as unregistered securities.
Despite this, Jeff Dorman, chief investment officer of crypto hedge fund Arca, said in an interview with Bloomberg that the SEC’s lawsuit against Binance will not have a long-term impact on currency prices.
At the same time, Jeff Dorman pointed out that the real harm in the incident will be Coinbase, Kraken and other US trading platforms. As supervision becomes more stringent, they must decide whether to remove these tokens, and US market makers will also be affected. They Market making for certain tokens classified as securities may have to cease. Jeff predicts:
The lawsuit is not expected to have a long-term impact on token prices as they can still be traded on offshore trading platforms.
As of press time, neither Coinbase nor Kraken have responded to the SEC's actions. Previously, Coinbase had stated that if the SEC ruled that certain tokens were classified as securities, it would not delist them until a final court ruling.
US SEC Chairman Gary Gensler tweeted that he will attend Squawk on the Street and Bloomberg TV at 9:10 EST (21:10 Beijing time) and 10:30 (22:30 Beijing time) respectively to discuss cryptocurrencies and securities. Law-related issues.
Let’s see what medicine the SEC is selling this time!
SEC Chairman: SEC stands ready to work with crypto industry to achieve compliance if crypto tokens have real value
To put it bluntly, SEC wants a piece of the pie!
Is Binance being investigated? Don’t panic too much. After the bad news comes the good news! With Binance’s size and depth, what are you afraid of? ? ? ?
CCTV is here again! The world's largest cryptocurrency exchange! CCTV even admitted what they were afraid of and gave it free publicity! Hard broad! CZ is awesome!
Moreover, there are many such investigations every year. If it succeeds, it will be fined. If it fails, it will be a lawsuit with sec like Ripple! Then just have the ready stock in hand. Don’t panic! Hold on! You can also buy some BNB at the bottom!