SEC’s Binance suit contains heavy mix of predictable charges, novel revelations
The announcement of the United States Securities and Exchange Commission (SEC) suit against Binance, Binance.US and Binance CEO Changpeng Zhao (CZ) may have surprised the crypto community, but the SEC’s focus on the exchange was well known. The suit’s contents were met with a variety of reactions.
CZ claimed in a tweet on the morning of June 5, “Media gets the info before we do,” and the company had not seen the SEC complaint then. Evidence of scrambling behind the scenes may be seen in the two statements Binance issued in response to the suit.
The exchange called the suit “disappointing” in a blog post and emphasized the SEC’s failure to provide clarity and guidance, as well as its impact on financial innovation. A later statement distributed by email addressed legal issues more closely, claiming there was a lack of due process and promising a vigorous defense.
No one who was paying attention should have been taken unawares by the SEC’s complaint, Cory Klippsten, CEO of financial firm Swan Bitcoin, said of the allegations. He claimed in a statement to Cointelegraph:
Some of the details will still raise eyebrows. The most quotable passage in the suit undoubtedly came from the unnamed Binance chief compliance officer in 2018, who said in a message to another company officer:
More light was shed on Brian Brooks’ brief tenure as CEO of Binance.US. Brooks, former U.S. comptroller of the currency and CEO of Binance.US for three months in 2021, is memorably quoted in the suit (as “CEO B” of BAM Trading). According to the SEC, Brooks said in testimony:
The SEC has repeatedly claimed that nearly all cryptocurrencies are securities, so the list of 10 tokens may also be illuminating. There are familiar claims, such as that Filecoin
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