{"id":138498,"date":"2023-05-03T11:19:48","date_gmt":"2023-05-03T11:19:48","guid":{"rendered":"https:\/\/crypto-economy.com\/?p=138498"},"modified":"2023-05-03T14:54:11","modified_gmt":"2023-05-03T14:54:11","slug":"binances-future-in-jeopardy-ex-sec-official-alarms","status":"publish","type":"post","link":"https:\/\/crypto-economy.com\/binances-future-in-jeopardy-ex-sec-official-alarms\/","title":{"rendered":"An ex-SEC official has raised concerns about the future of\u00a0Binance"},"content":{"rendered":"<p style=\"text-align: justify\">John Reed Stark, the former SEC Enforcement Division lawyer, has taken to Twitter to warn that the future of the largest cryptocurrency exchange in the world by trading volume,<strong> <a href=\"https:\/\/crypto-economy.com\/binance-exchange-review-complete-guide\/\" target=\"_blank\" rel=\"noopener\">Binance,<\/a> might be in jeopardy<\/strong>.<!--more--><\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">Binance&#39;s future is in jeopardy, at least that&#39;s my opinion. Having worked as a lawyer in the SEC Enforcement Division for 18 years, I was trained to spot red flags. When I read about Binance, I see a lot of red flags. <\/p>\n<p>Lack of Reliable, Trustworthy Information<\/p>\n<p>Just consider\u2026 <a href=\"https:\/\/t.co\/hXFahhwZuo\" target=\"_blank\">pic.twitter.com\/hXFahhwZuo<\/a><\/p>\n<p>&mdash; John Reed Stark (@JohnReedStark) <a href=\"https:\/\/twitter.com\/JohnReedStark\/status\/1653458451987611648?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">May 2, 2023<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p style=\"text-align: justify\">Stark, who claimed to have worked as a lawyer in the SEC Enforcement Division for 18 years, cited several red flags surrounding Binance, including a lack of verifiable and trustworthy information, a CFTC action alleging regulatory violations, allegations of commingling customer funds, and a lack of proof of reserves and audited financials.<\/p>\n<h2>Binance Might Experience a Bank Run, Stark Said<\/h2>\n<p style=\"text-align: justify\"><strong>The former SEC official asserted in a long article-like tweet that Binance has never provided true proof of reserves and bona fide audited financials,<\/strong> citing a <a href=\"https:\/\/www.cnbc.com\/2022\/12\/16\/mazars-suspends-all-work-with-crypto-clients-including-binance-cryptocom.html\" target=\"_blank\" rel=\"noopener\">CNBC article<\/a> that reveals that the company&#8217;s auditor, Mazars Group, quit and suspended all work with Binance and other crypto clients.<\/p>\n<p>He said,<\/p>\n<p style=\"text-align: center\"><em>\u201cBinance\u2019s so-called auditor suddenly quit and disavowed the validity of all of its representations.\u201d<\/em><\/p>\n<p style=\"text-align: justify\"><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone wp-image-138523 size-full\" src=\"https:\/\/crypto-economy.com\/wp-content\/uploads\/2023\/05\/American-SEC.jpg\" alt=\"Binance Might Experience a Bank Run, Stark Said\" width=\"825\" height=\"300\" srcset=\"https:\/\/crypto-economy.com\/\/wp-content\/uploads\/2023\/05\/American-SEC.jpg 825w, https:\/\/crypto-economy.com\/\/wp-content\/uploads\/2023\/05\/American-SEC-300x109.jpg 300w, https:\/\/crypto-economy.com\/\/wp-content\/uploads\/2023\/05\/American-SEC-768x279.jpg 768w\" sizes=\"(max-width: 825px) 100vw, 825px\" \/><\/p>\n<p style=\"text-align: justify\">Moreover, <strong>the mystery surrounding the actual location of Binance&#8217;s headquarters is another issue that John Reed Stark calls a red flag<\/strong>. Although its holding company is based in the Cayman Islands, Binance has repeatedly said it does not have a headquarters and has declined to state the location of its main Binance.com exchange.<\/p>\n<p style=\"text-align: justify\">Additionally, he argues that Binance refuses to reveal basic information about its financial information, such as revenue, profit, and cash reserves. Also,<strong> there&#8217;s no public information about the role its native crypto coin, BNB, plays on its balance sheet<\/strong>, its crypto-margin bets, or its risk exposure, among others.<\/p>\n<p style=\"text-align: justify\"><strong>The recent CFTC <a href=\"https:\/\/crypto-economy.com\/is-binance-in-danger-cftc-sues-the-exchange-and-cz\/\" target=\"_blank\" rel=\"noopener\">enforcement action<\/a> against the exchange is perhaps the most significant red flag,<\/strong> according to Stark. The action alleges that Binance has encouraged customers and employees to evade US regulations since at least 2018.<\/p>\n<p style=\"text-align: justify\">Stark also accuses the crypto firm of &#8220;regulatory misappropriation&#8221; by hijacking legitimate regulatory labels to create a counterfeit veneer of assurances, integrity, expertise, and regulatory supervision.<\/p>\n<h2>He Advises Users to Quit<\/h2>\n<p style=\"text-align: justify\">Stark referenced several articles on popular outlets like the WSJ, CNN, and CNBC to support his claims. He said Binance\u2019s reserve stablecoins may not hold their peg, <b>there could be a bank run on Binance at any moment<\/b>, and that the US DOJ may opt to charge Binance with criminal misconduct.<\/p>\n<p style=\"text-align: justify\">However, it remains to be seen whether all these assertions are factual. While getting these pieces of information from reputable sources does not make them true, Stark warns that more Binance-related civil and criminal prosecutions may be imminent.<strong> He advises those with a Binance account to get out now.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>John Reed Stark, the former SEC Enforcement Division lawyer, has taken to Twitter to warn that the future of the largest cryptocurrency exchange in the world by trading volume, Binance, might be in jeopardy.<\/p>\n","protected":false},"author":26,"featured_media":138500,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[102,84,74],"tags":[4601,5256,4816],"_links":{"self":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts\/138498"}],"collection":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/users\/26"}],"replies":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/comments?post=138498"}],"version-history":[{"count":0,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts\/138498\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/media\/138500"}],"wp:attachment":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/media?parent=138498"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/categories?post=138498"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/tags?post=138498"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}