The post Binance’s Risky Move: Provoking the SEC Amid Global Legal Storms appeared first on Coinpedia Fintech News
Binance, the prominent cryptocurrency exchange, has made a daring move amidst looming enforcement action by the US Securities and Exchange Commission (SEC). It has issued a formal request to Judge Amy Berman Jackson, requesting her to prohibit SEC attorneys from publicly stating that the company and its CEO, Changpeng Zhao (CZ), have mishandled the assets of their American clients.
Allegations Fly As Binance Seeks Legal Protection
Binance’s petition draws attention to an SEC press release in which the Director of SEC Enforcement, Gurbir Grewal, alleges that CZ and Binance exercise unrestricted control over customer assets, enabling them to commingle or divert these assets at will.
Responding vigorously, Binance argues that the SEC has failed to provide any concrete evidence to back these charges. The company also points out that the SEC’s statements could prejudice the jury, hence calling for a gag order on the SEC’s attorneys in line with the professional conduct rules of Washington, DC.
While the motion carries certain benefits, many observers believe that it could backfire.
The Downside: Could Binance’s Motion Fan the Flames?
The benefits of the motion are noteworthy. It signals Binance’s aggressive and innovative legal stance and may pressure the SEC to be more cautious and restrained in its public utterances about the exchange. In addition, the move may earn Binance favor with its customers and its zealous Twitter following, which is good for business. Finally, it could potentially result in a reprimand from Judge Jackson, an unsettling prospect for any SEC staff member.
However, if a criminal indictment is already under consideration or filed secretly, Binance’s motion could be seen as an antagonistic and audacious provocation that might spur criminal prosecutors into early action.
The SEC, in its filings, has mentioned an ongoing criminal investigation into Binance and CZ. This kind of disclosure in SEC pleadings is highly unusual. Normally, the SEC remains tight-lipped about parallel criminal investigations. This departure from the norm suggests that the SEC might be cooperating with criminal prosecutors and the FBI, signaling imminent criminal action.
The Global Investigative Landscape: Why Binance Should Be Concerned
Binance’s confrontational approach, challenging the SEC’s ethical conduct and questioning its allegations of fraud and market manipulation, seems to dare the authorities to prove them wrong. This audacity, however, does not bode well for a company already in the prosecutorial crosshairs on multiple fronts.
Binance faces charges from the CFTC and SEC alleging a colossal criminal enterprise. Despite the enormity of these charges, they notably skirt the issue of money laundering, which could potentially be the target of a forthcoming US DOJ criminal prosecution against the exchange.
Moreover, Binance is reportedly under preliminary investigation by the Paris prosecutor’s office for illicit client canvassing and money laundering. These allegations further fuel speculation that a US DOJ-led criminal prosecution might be on the cards.
Irony, Misplaced Confidence, and What Lies Ahead
Complicating the situation, Binance faces a preliminary investigation in Paris for illegal client solicitation and money laundering. These allegations further hint at an impending US DOJ-led criminal prosecution.
“I don’t care what happened in the U.S. We are in Europe, with a French regulator, a European regulator.” David Princay – President of Binance France
Binance France’s president, David Prinçay, recently dismissed concerns about US charges affecting Binance’s operations. However, given the French investigation, one can speculate his comfort level has taken a hit.
While Binance argues for lack of evidence regarding alleged asset mishandling, the saying “be careful what you wish for” seems relevant. It’s not a matter of “if”, but “when” the next shoe will drop.