- According to rumors, the US Securities and Exchange Commission (SEC) intends to pursue legal action against Binance.
- The securities commission is considering acting against the exchange or its American affiliate.
- After the demise of FTX, the exchange has been under increased scrutiny.
The US Securities and Exchange Commission (SEC) has reported that it is initiating enforcement action against Binance, the world’s biggest cryptocurrency exchange. Yet, it is uncertain if Binance or Binance is correct. The SEC has targeted the United States.
Binance, the cherished poster child of the crypto sector, has been heavily scrutinized by regulators since the FTX crash.
After a series of assaults on crypto exchanges Coinbase, Bittrex, Kraken, and other crypto-related organizations, the securities regulator is looking to take action against Binance or Binance.US.
The Securities and Exchange Commission, according to Andrew and his two sources, is extremely close to initiating action against Binance and its US subsidiary, as well as its CEO Changpeng Zhao. According to the sources, the prospective measures might entail unregistered securities, money laundering, or both.
Binance momentarily banned Bitcoin withdrawals owing to a large number of outstanding transactions on the Bitcoin blockchain, which resulted in higher fees and network delays.
After the FTX catastrophe last year, the SEC has increased its attempts to oversee the crypto business. Staking businesses such as Coinbase Earn are now under increased scrutiny due to their failure to register with the authority.
Binance, a cryptocurrency exchange, has come under heavy scrutiny since the demise of FTX. In March, the US Commodity Futures Trading Commission (CFTC) initiated an enforcement action against Binance and CEO Changpeng Zhao for breaking commodities laws and running an unlawful derivatives exchange. The US is also investigating Binance for a number of issues, including breaches against Russia.
Andrew also cautioned that the US Department of Justice (DOJ) might be involved in investigations against Binance after the SEC’s legal action.
Detractors have already alleged that the firm is managed by a walking time bomb, and now John Reed Stark, former chief of the SEC Office of Internet Enforcement, is advising users to get out of the exchange.
Stark worked as an attorney for the US Securities and Exchange Commission for 18 years. His expertise ranged from hacking to market manipulation to insider trading and fraud. Stark spent time crafting regulatory regulations surrounding new technology while working in another capacity.
The SEC has also said unequivocally that it will clamp down on cryptocurrency firms.
The SEC has sent a Wells notice to Coinbase, threatening enforcement action for listing securities and staking services. Coinbase said that the SEC action would have no effect since the exchange does not list securities and chastised the SEC for lack of clarity about digital asset rules.
Kraken has agreed to pay $30 million in fines and shut down its bitcoin staking business in the US as part of a deal with the SEC, which the SEC claims was not properly registered.
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