Wall Street regulator sues Binance, new earthquake for cryptos?

• In the United States, a complaint has been filed by the stock market constable against Binance, the world leader in cryptos
• There are, in all, 13 charges, against Binance and its CEO
• The crypto exchange has already reacted and considers these accusations to be “unwarranted”

Shaken by the fall of FTX in 2022, the crypto market has been doing better since the start of the year. But this lull could already be over. The reason: in the United States, the SEC or Securities and Exchange Commission, the Wall Street policeman, Binance, the world’s number one crypto. This lawsuit was filed in a District of Columbia court and includes a total of 13 charges.

“Through thirteen counts, we allege that the entities Zhao (editor’s note, the boss of Binance) and Binance have engaged in a vast web of deception, conflicts of interest, lack of disclosure and eva calculated”said SEC Chairman Gary Gensler.

But what exactly does the regulator blame the crypto exchange for? In its press release, the SEC accuses Binance of having helped certain customers to circumvent its own restrictions. As you may already know, Americans are not supposed to use Binance.com, but another platform called Binance.US.

Separation between Binance.com and Binance.US

Officially, access to the global platform is blocked for US users. But according to the policeman of the American stock exchange, Binance would have secretly allowed large American customers to circumvent this restriction to trade.

Today we charged Binance Holdings Ltd. (Binance); US-based affiliate, BAM Trading Services Inc., which, together with Binance, operates https://t.co/swcxioZKVP; and their founder, Changpeng Zhao, with a variety of securities law violations.https://t.co/H1wgGgR5ir pic.twitter.com/IWTb7Et86H

— US Securities and Exchange Commission (@SECGov) June 5, 2023

The SEC also points to a lack of separation between Binance and Binnance.US and raises concerns about the management of customer assets. “The SEC also alleges that Zhao and Binance exercise control over the assets of clients of the platforms, allowing them to mix client assets or divert client assets at will, including to a Zhao-owned and controlled entity called Sigma Chain”, explains the regulator. And to all this are added accusations of manipulation (according to the SEC, Binance would artificially inflate the transaction volumes of its platform), or even problems of compliance with American laws.

The reaction of the boss of Binance

Binance has already reacted to this complaint. Quoted by CNN, a representative of the platform indicates that if it takes the accusations seriously, it considers them to be unjustified. Binance in particular denies the accusation that the platform is an illegal stock exchange. The exchange even accuses the United States of waging a regulatory tussle, of which it would be a victim because of its size. Note that before the SEC, another American policeman had already filed a complaint against Binance.

For his part, the CEO also reacted by suggesting that FUD (acronym for fear, uncertainty and doubt), fake news and attacks should be ignored. “CZ” also assured that the Binance system remains stable, including deposits and withdrawals.

4.

Our team is all standing by, ensuring systems are stable, including withdrawals, and deposits.

We will issue a response once we see the complaint. Haven’t seen it yet. Media gets the info before we do.

🙏

— CZ 🔶 Binance (@cz_binance) June 5, 2023

And if for the moment, we cannot speak of an earthquake comparable to the fall of FTX, the announcement of the SEC complaint had an effect on the value of Bitcoin. It fell sharply and is now hovering below $26,000.