Binance.US, a crypto exchange based in the United States, has allegedly hired an ex-enforcement officer from the Securities and Exchange Commission (SEC) to be part of their legal team in order to protect themselves against claims of operating without registration as a securities exchange.
According to a June 12 article from Bloomberg, Binance.US has enlisted the help of George Canellos, former co-director of SEC enforcement, and three other lawyers from the international law firm Milbank LLP. Canellos departed the SEC in 2014 after spending more than four years in various administrative roles.
John Reed Stark, the former head of the SEC’s internet enforcement division, tweeted that “Binance is obviously getting ready for a criminal prosecution and still hiring the top lawyers in the world.” He went on to say that given the serious nature of the deceit charged by the CFTC and SEC (which could be the peak of any criminal indictment), a DOJ prosecutor would definitely seek jail time for anyone found guilty or pleading guilty for crimes connected to Binance.
Canellos’ joining of the Binance.US legal team occurred while the U.S. firm was being sued by the SEC for not registering as an exchange, broker, and clearing agency. The SEC made similar claims against Binance globally and Coinbase in a separate filing, and sought to freeze the U.S. exchange’s assets through a temporary restraining order.
Binance.US, in a June 12 filing on the SEC’s court petition to freeze assets, stated that “if the Court does address the merits of the SEC’s motion, it should deny that motion”. They added that the SEC’s proposed remedies would be devastating to their business, as it would involve a “draconian and unduly burdensome freeze of all the company’s operations without any exceptions.”
Binance.US has suspended trading for a number of USDT, BTC, and BUSD pairs in response to the SEC’s lawsuit.
In response to the SEC’s actions, Binance.US declared on June 9 that it would be halting U.S dollar deposits and potentially ceasing fiat withdrawals commencing as soon as June 13. The exchange attributed the SEC’s “excessively aggressive and intimidating strategies” as its justification for the decision.
U.S. legislators and industry heads have denounced the SEC for its apparently stringent enforcement of crypto regulations. On June 12, Representative Warren Davidson put forth a bill intended to restructure the commission, which included a demand for the dismissal of SEC chair Gary Gensler.
Does SEC Chair Gary Gensler have the ultimate authority when it comes to crypto regulation?
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