quick shot:
- Binance has released a statement accusing the SEC of making a unilateral decision amid ongoing investigations.
- The US capital markets watchdog is accusing Binance of misusing client funds and running an illegal crypto exchange in the US.
- Binance claims that it cooperated with the investigations and worked hard to answer your questions and address your concerns.
Binance has responded to the Securities and Exchange Commission (SEC) for filing a lawsuit against its US subsidiary. The US capital markets regulator claims that Binance operated an illegal crypto exchange in the country.
The SEC also says that the major cryptocurrency exchange has embezzled client funds, an allegation that Binance strongly refuted in a statement posted on its website.
"All user assets on Binance and Binance affiliated platforms, including Binance.US, are safe and secure, and we will vigorously defend against any allegations to the contrary." the declaration read
Binance accuses the SEC of abandoning negotiations after apparently reaching an agreement to resolve their investigations.
โMore recently, we have engaged in extensive good faith discussions to reach a negotiated agreement to resolve your investigations. But despite our efforts, with your complaint today, the SEC abandoned that process, choosing instead to act unilaterally and litigate."
In the SEC's complaint, the regulator says Binance mixed billions of dollars of client funds and secretly sent them to a company controlled by Binance founder Chengpeng Zhao (CZ).
โWe allege that Zhao and the Binance entities not only knew the rules of the road, but also consciously chose to evade them and put their clients and investors at risk,โ said Gurbir Grewal, head of the SEC's enforcement division.
The regulator further claims that Binance operated an illegal crypto exchange platform in the country by allowing high-end US clients to trade on Binance.com.
โZhao and Binance actually subverted their own controls to secretly allow high-value US clients to continue trading on the Binance.com platform,โ a SEC statement saysadding that despite claiming to create a separate entity, Binance.US for the US market, Zhao and Binance.com secretly controlled Binance.US's operations behind the scenes.
In its defense, Binance claims that instead of the SEC helping to establish an effective regulatory framework through transparency, collaboration, and thoughtful agency engagement, the regulator chose to abandon the process, thereby undermining the role of United States as a world center of innovation.
Based on recent evidence, CZ and Binance appear to have been working hard to get into the good books of the SEC.
In a series of announcements made Monday, the company revealed that its summer internship program had received more than 8,000 applications. The program offers 23 successful applicants a 10-week immersive Advanced Management Program (AMP) training as part of an effort to nurture crypto talent in North America.
The company also announced the Rachel Conlan appointment, the former head of brand and partnerships at OKX as its vice president of global marketing. The move was seen as an attempt by the world's largest cryptocurrency exchange to renew its declining market share. Binance is on a mission to bring all 1 billion users into its ecosystem.
But the most exciting news came from the company's internal appointments, with former Abu Dhabi regulator Richard Teng taking on a broader role overseeing regional markets outside the US.
The appointment is reportedly seen as a step toward replacing Binance founder Chengpeng Zhao as CEO. CZ has reportedly been looking to reduce his stake in Binance.US to try to appease US regulators.
But Teng, who will now oversee Binance's operations in Asia, Europe, the Middle East and North Africa, played down the idea that he is being groomed to replace CZ, calling it "an extended responsibility to help." [Zhao] look at certain things.โ
"Speculating on such things would be premature," Teng, told CoinDesk. โLet me emphasize that we have a very strong management team and a lot of strong leaders that look after different parts of the business. I'm happy to be a part of that and try to support the company's agenda and aspirations."
If some of these appointments and announcements were made to try to build some bridges with the SEC, then the US capital markets watchdog seems to have decided not to get close.
โIt appears, based on these developments, that the SEC's goal here was never to protect investors; if that were indeed the case, the staff would have carefully engaged us in the facts and in our efforts to demonstrate the security of the Binance.US platform. The SECโs real intent here instead appears to be to make headlines,โ Binance wrote following the SECโs decision to sue the cryptocurrency exchange.
However, CZ and Binance are not giving up just yet. The company maintains that it will continue to work with regulators in the US and other parts of the world as it "remains committed to productive engagement to ensure that the next generation of cryptocurrency regulation fosters innovation while implementing and ensuring important protections for consumers.
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