Binance.US Under Continuous SEC Scrutiny, Assets and User base Plummet Amid Legal Pressure
Summary:
The U.S. Securities and Exchange Commission (SEC) continues to probe Binance.US over alleged misuse of customer assets. No evidence of wrongdoing has been found, yet the investigation continues, causing a 90% drop in assets and a halving of the user base. Binance and its founder have recently plead guilty to transgressions against U.S anti-money-laundering laws. A court decision is awaited to allow Binance founder CZ to temporarily leave the U.S. pending his sentencing in February.
The U.S. Securities and Exchange Commission (SEC) continues its investigations into whether Binance.US had the capacity to manipulate customer funds, in a fashion akin to FTX, as per a report by the Wall Street Journal on November 27.
In June, Binance and its American counterpart, Binance.US were sued by the SEC under the suspicion of selling unregistered securities, with further allegations of fraud, concealment of essential information and disregard of legal protocol. Noteworthy among the charges was the alleged misuse of customer funds, including alleged unauthorized transfers to the Swiss enterprise Sigma Chain which is said to be under the management of Zhao, Binance's founder.
During a court hearing on November 27, lawyers representing Binance.US argued against the SEC's inability to present conclusive evidence of the misuse of funds and urged U.S. Magistrate Judge Zia Faruqui to contemplate putting a halt to the investigation. Matthew Laroche, an attorney for Binance.US, mentioned that the legal costs had skyrocketed, and Binance.US had endured substantial losses, with nearly 90% decline in assets and half the number of users since the suit was filed.
Meanwhile, Binance along with CZ conceded to transgressions against U.S anti-money-laundering laws, resulting in a settlement of $4.3 billion with the U.S Justice Department, Treasury, and Commodity Futures Trading Commission (CFTC) just last week. However, the lawsuit did not incorporate any of the fraud-related charges presented by the SEC against the cryptocurrency exchange in June.
Presiding over the case, Judge Faruqui elicited that the guilty pleas made it less probable that Binance.US and CZ were involved in the mishandling of customer funds. The judge has called for Binance.US and the SEC to seek resolution and provide an update by December 15.
In parallel, CZ is presently awaiting a court's decision regarding his ability to briefly leave the U.S until two weeks before his sentencing date, tentatively scheduled for February. Currently, he has been denied permission to travel to the UAE, where he primarily resides until a court reviews a request submitted by the U.S. government.
CZ could potentially serve up to 18 months in prison as per federal sentencing guidelines, indicating a rising intensity of U.S. enforcement agencies towards combating criminal activities related to cryptocurrency.
Published At
11/27/2023 11:31:57 PM
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