As per the recent development, the SEC has filed a suit against Binance and its CEO for alleged violation of securities law. The regulatory body pressed a total of 13 charges against the crypto exchange, which include unregistered offers and sales of both BNB and BUSD tokens, along with Simple Earn and BNB Vault Products, and Binance’s staking program.
The SEC further stated that Binance had failed to register itself as an exchange and a broker-dealer. With the situation getting worse, Changpeng Zhao tweeted and highlighted how the teams at Binance are ensuring the stability of its systems. CZ also raised concerns about the news getting to the media first instead of the accused.
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
The SEC vs Crypto, A Never-Ending Drama!
Binance met great support from several other cryptocurrency giants not too long after the crackdown of the SEC. The co-founder of Cardano, Charles Hoskinson, stated that the current situation is not anything new and that it is always the same battle between innovators and authoritarianism. Despite the current situation seeming dire for both investors and the crypto market, the future remains bright for the industry.
With respect to Binance, I'm reading through the SEC complaint. It's over 130 pages, but seems like the next in a series of steps to implement chokepoint 2.0 in the United States. The end goal is a agenda based CBDC partnered with a handful of massive banks and end-to-end control…
— Charles Hoskinson (@IOHK_Charles) June 5, 2023
Furthermore, Justin Sun, the founder of Tron, openly expressed his support for Binance. Sun pointed out the capabilities of Binance and its commitment to serving users in the best way possible and mentioned how he believes that the exchange would find its way out of these hard times. He also made it clear that he believes that Zhao is an honest individual,
I wanted to take a moment to express my unwavering support for you. As one of my friends, I trust you and believe in your integrity. We are here for you!
I am fully aware of your dedication to advancing the cryptocurrency industry, and your abilities and ethics are beyond… https://t.co/kCRJHpULPU
— H.E. Justin Sun 孙宇晨 (@justinsuntron) June 5, 2023
“Please remember that you are never alone, no matter the circumstances or challenges you face. As your friends, we will always be by your side, offering our unwavering support and encouragement. We believe that justice will be served, and we will face this challenge together.”
The CEO of CryptoQuant, Ki Young Ju shared an analysis of how the user balances are increasing on Binance despite the lawsuit filed by the SEC. He further addressed the FUD related to the whole episode.
— Ki Young Ju (@ki_young_ju) June 5, 2023
The SEC’s Allegations Against Binance
The allegations from the SEC included claims regarding Binance’s failure to stop users from using the platform. These allegations also included claims about Binance’s alleged engagement in wash trading via its trading firm, Sigma Chain, which is also owned by Zhao. Currently, the SEC is persistent in demanding the permanent enjoinment of Binance and Zhao from any possible activities and demands the return of any ill-gotten gains with interest.
With the current suit sending shocks throughout the cryptocurrency industry, numerous tokens have declined drastically. Investors were already discouraged from investing in crypto, and the recent situation just made it worse for the crypto market. Many argue that this move is simply another act of regulation by enforcement. However, allegations against Binance are not new either, as the SEC has been obsessed with the platform since 2022.