The recent SEC charges against Binance, its U.S. based exchange platform, and CEO Changpeng Zhao have stirred up a range of reactions in the crypto community. Accusations of mishandling customer funds and violating U.S. banking regulations were first reported by Reuters, and now, the SEC has filed 13 charges against the company. The central question at the heart of this issue is whether Binance is using its “Tai Chi” strategy to evade regulators, or if the SEC is utilizing “Operation Chokepoint 2.0” to stifle the growth of the crypto industry.
The term “Tai Chi” was first used in a 2020 Forbes report, suggesting that Binance was employing a series of steps to avoid regulatory scrutiny in the U.S. However, Binance has rejected these claims and even threatened to sue Forbes. Coin Metrics co-founder Nic Carter coined the term “Operation Chokepoint 2.0,” which refers to an alleged effort by U.S. lawmakers and regulators to disrupt the growth of crypto.
Many in the crypto community argue that the SEC lawsuit against Binance isn’t typical, as regulators seldom name executives, implying a possible massive settlement. Others pointed out that the charges pertain to the U.S. arm of Binance, handling only a small portion of the global trading volumes.
With the SEC lawsuit reigniting the debate, Cardano founder Charles Hokinson fueled the “Chokepoint 2.0” theory, asserting that the end goal of this effort is to have a central bank digital currency (CBDC) partnered with large banks and exert control over financial aspects. Critics of this theory argue that it’s baseless in Binance’s case, as the exchange had clearly been selling securities.
Meanwhile, the mention of the “Tai Chi” strategy in the SEC lawsuit has led some in the crypto community to revisit the 2020 report. It has been alleged that Zhao and Binance secretly controlled the Binance US platform’s operations, misusing customer assets, and operating unregistered national securities exchanges, among other accusations.
Ultimately, the debate over whether Binance’s “Tai Chi” strategy or the SEC’s “Operation Chokepoint 2.0” is driving this lawsuit reflects the current state of uncertainty in the crypto industry. With the future of regulation hanging in the balance, market participants and observers will closely watch the outcome of this case to glean clues about the regulatory environment’s direction in the U.S. and elsewhere.
Source: Cointelegraph
