SEC sues crypto giant Binance
Everything you NEED to know about the U.S. Securities and Exchange Commission (SEC) lawsuit against Binance.
The US regulator is on the full offensive and is going after Binance & Changpeng Zhao “CZ”.
I read the whole 136-page-long complaint in detail (so you don’t have to 😃) and here is what you need to know.
The crux of the SEC’s lawsuit against Binance is the word “SECURITY”, which appears 258 times in the complaint!
Basically, the main argument of the US regulator is that the tokens listed on Binance (non-US entity) and Binance.US (US entity) are in fact “securities”, hence Binance has been involved in offering & selling unregistered securities, operating an unregistered securities exchange, clearing agency & broker-dealer, wrongfully onboarded US clients, in addition to failing to implement KYC/AML.
The SEC explicitly mentions Binance (BNB), BUSD, Solana (SOL), Cardano (ADA), Polygon (MATIC), Coti (COTI) and Algorand (ALGO), Filecoin network (FIL), Cosmos hub (ATOM), Sandbox (SAND), Axie infinity (AXS) and Decentraland (MANA), as “crypto asset securities”.
Same as in the CFTC lawsuit, the SEC alleges that Binance “trades against its clients” through Merit Peak Limited and Sigma Chain AG, crypto market-making & proprietary trading firms, whose sole owner is CZ.
Some media (shame on you!) are trying to make a connection with the scandalous way FTX and Alameda Research operated, but based on the info in the lawsuit, this is completely unfounded! The lawsuit DOES NOT say that Binance.US took client deposits and gave them for market-making to Merit Peak or Sigma Chain.
Perhaps the fascinating part of the SEC’s lawsuit is the references to the so-called “Tai Chi” documents, which Forbes reported on in 2020, which is a plan for Binance to officially exit the US while still maintaining a presence through an affiliate.
The US regulators are going after crypto companies and the nuclear ☢️ crypto winter continues. Let’s brace ourselves!
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