Binance.US Under Investigation by SEC for Potential Fraud
Following the guilty plea of former Binance CEO Changpeng Zhao as part of a $4 billion settlement with US regulators, the Securities and Exchange Commission (SEC) is now investigating Binance.US. The SEC is reportedly looking for evidence that the company and its founder may have a backdoor similar to that of FTX, a crashed crypto exchange, which would allow them to control assets stored on the Binance.US platform.
In a recent status conference, Binance.US argued that the SEC could not prove any misuse of user assets and accused the regulators of overstepping their authority. The SEC invoked the major questions doctrine, which requires clear congressional authorization for regulatory actions. A joint status update is expected in mid-December.
Binance’s Legal Troubles
Binance Holdings Limited, the operator of the world’s largest crypto exchange, pleaded guilty to charges of anti-money laundering, unlicensed money transfer, and sanctions violations. As a result, Binance Coin (BNB) experienced a significant drop in value, losing 15% as traders expressed their distrust in the token. However, it has since rebounded and is currently trading at $229.40 with a 0.38% increase on November 29.
JPMorgan analyst Nikolaos Panigirtzoglou believes that the settlement was positive for both Binance and the crypto sector as a whole because it eliminated a systemic risk associated with a potential Binance crash.
Cristiano Ronaldo Faces Charges Related to Binance Advertising
Football star Cristiano Ronaldo is facing charges in a lawsuit alleging his involvement in promoting and selling unregistered securities in coordination with Binance. The lawsuit claims that individuals suffered financial losses due to this advertising.
Hot Take: The Fallout from Binance’s Legal Issues
The ongoing investigation by the SEC into Binance.US adds to the legal troubles faced by the cryptocurrency trading platform. With allegations of potential fraud and a backdoor to control user assets, Binance’s reputation has taken a hit. The guilty plea and fines imposed on Binance Holdings Limited have also affected investor confidence, leading to a drop in Binance Coin’s value. As the legal proceedings continue, it remains to be seen how Binance will navigate these challenges and rebuild trust in its operations.
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