US SEC sues Binance for deception, crypto market takes a hit

FILE - Binance CEO Changpeng Zhao answers a question during a Zoom meeting interview with The Associated Press on Nov. 16, 2021. (AP Photo, File)

Cryptocurrencies and shares in blockchain-related firms experienced a sharp decline following the US Securities and Exchange Commission’s (SEC) lawsuit against Binance, the world’s largest crypto exchange. The SEC accused Binance and its CEO Changpeng Zhao of secretly controlling Binance.US, inflating trading volumes, diverting customer funds, and failing to restrict US customers from its platform. This has led to a drop in Bitcoin’s value, as well as Binance’s own cryptocurrency.

The lawsuit, filed in a federal court in Washington, DC, is the latest in a series of enforcement actions by the SEC to regulate the cryptocurrency industry, which SEC Chair Gary Gensler has labelled as “the wild West”. This crackdown has prompted crypto companies to enhance compliance, cease certain products, and expand their operations overseas.

John Reed Stark, a former chief of the SEC’s Office of Internet Enforcement, commented, “This is yet another targeted attack that is devastating in the crypto ecosystem. Pretty soon, the SEC won’t have anyone left to sue.”

Binance expressed disappointment with the SEC’s decision to litigate, stating that it had been cooperating with the regulator’s investigations and attempting to reach a negotiated settlement. The SEC’s aggressive approach towards the crypto industry has led to several companies facing legal challenges, including Bittrex, Kraken, and Coinbase Global.

James Angel, a finance professor at Georgetown University, warned that many big crypto companies are now “in a heap of trouble” and should be hiring the best regulatory counsel available, reports Channel News Asia.

The ongoing regulatory actions in the US highlight the need for safeguards in the crypto market to meet investor and customer expectations, according to Rajeev Bamra, senior vice president and head of decentralised finance and digital assets strategy at Moody’s Investors Service. He added, “Consequently, these charges have the potential to reshape the regulatory landscape for digital assets.”

Thailand News

Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Alex Morgan

Alex is a 42-year-old former corporate executive and business consultant with a degree in business administration. Boasting over 15 years of experience working in various industries, including technology, finance, and marketing, Alex has acquired in-depth knowledge about business strategies, management principles, and market trends. In recent years, Alex has transitioned into writing business articles and providing expert commentary on business-related issues. Fluent in English and proficient in data analysis, Alex strives to deliver well-researched and insightful content to readers, combining practical experience with a keen analytical eye to offer valuable perspectives on the ever-evolving business landscape.