The announcement of the SEC’s lawsuit against Binance, Binance.US, and Binance CEO Changpeng Zhao (CZ) may have caught the crypto community by surprise, but the SEC’s focus on the exchange was well known. The lawsuit’s contents met with a variety of reactions.
cz claimed In a tweet on the morning of June 5th, “the media gets the info before then,” and the company had not seen the SEC complaint at the time. Evidence of the behind-the-scenes scramble can be seen in the two statements Binance issued in response to the lawsuit.
Exchange called the lawsuit “disappointing” in a blog post and confirmed The SEC’s failure to provide clarity and direction, as well as its impact on financial innovation. A later statement distributed via email dealt with the legal issues more closely, claiming a lack of due process and promising a strong defense.
Anyone who has been paying attention to the SEC complaint should not be surprised, said Cory Clepsten, CEO of financial firm Swan Bitcoin. He claimed in a statement to Cointelegraph:
“These Binance practices were essentially open secrets, so anyone working in the space wouldn’t be surprised by any of the charges.”
Some details will still surprise. The most quotable passage in the lawsuit undoubtedly came from Binance’s unnamed chief compliance officer in 2018, who said in a letter to another company official:
“We operate as an over-the-counter financial market fking in the USA bro.”
More light is shed on Brian Brooks’ short tenure as CEO of Binance.US. Brooks, the former US Comptroller of the Currency and CEO of Binance.US for three months in 2021, is memorably quoted in the lawsuit (as “CEO B” of BAM Trading). According to the SEC, Brooks said in his testimony:
(W)It became clear to me at a certain point that CZ was the CEO of BAM Trading, not me. (…) I realized, well, I’m not the one actually running this company, and the job I think I’m signed up for isn’t the job And as soon as I realized that, I left.”
The SEC has repeatedly claimed that almost all cryptocurrencies are securities, so the list of 10 coins may also be illuminating. There are familiar claims, such as that Filecoin (FIL) is a security. Algorand (ALGO) has also been featured before.
For Solana (SOL), Cardano (ADA), and Polygon (MATIC), Binance’s suit may be a warning shot.
And guess which symbols are illegal securities offerings. Spoiler alert that includes Solana and Cardano. pic.twitter.com/wMdICfIE3j
– Steven Diehl (@smdiehl) June 5, 2023
There were already signs of change in the stock exchange. Around the same time as news of the SEC’s complaint, Bloomberg reported that it might be preferable for Richard Teng to replace CZ as the exchange’s new CEO. The news service quoted “people with first-hand knowledge”.
Related: Binance Prepares for the Checkbook of Potential Fines from US Regulators: Report
Teng was eye To head all regional markets outside the US on May 29. He joined Binance Singapore in August 2021, coming from the ADGM Financial Services Regulatory Authority, where he was CEO, and “rapidly rose through the ranks.”
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