The recent lawsuits filed by the US Securities and Exchange Commission (SEC) against both Binance and Coinbase have undoubtedly drawn significant attention within the crypto community. The most prominent difference between these two legal actions appears to be the range and severity of allegations brought forward by the regulator.
In the case of Coinbase, the SEC is mainly focused on the exchange’s purported violation of registration requirements. The lawsuit alleges that Coinbase and its holding company violated five laws, mainly by operating as an unregistered exchange and offering unregistered securities.
On the other hand, Binance is facing a more extensive list of accusations, with a total of 13 alleged legal violations. These include not only registration violations but also more severe allegations such as fraud, market manipulation, commingling of investor funds, and diversion of investment funds. The SEC also took the additional step of naming Binance’s CEO, Changpeng “CZ” Zhao, as a defendant in the suit.
It is worth noting that both exchanges have been vocal about their disagreements with the SEC’s claims. Binance has stated that it does not believe it has operated as an unregistered securities exchange or unlawfully offered and sold securities. Similarly, Coinbase CEO Brian Armstrong has emphasized that the lawsuit against his company is fundamentally different from other recent cases brought by the SEC.
The legal battles both exchanges are currently facing may ultimately come down to the ongoing debate about what constitutes a security in the world of crypto. The lawsuits effectively argue that certain digital assets offered by Binance and Coinbase should be considered securities under the law, a notion that both companies clearly disagree with.
While the outcome of these lawsuits is uncertain, it is likely that the debate surrounding securities regulations and the appropriate classification of digital assets will continue to be a hot topic within the crypto industry for the foreseeable future. As regulations continue to evolve, it will be crucial for companies operating in this space to ensure that they remain up-to-date on any changes in order to maintain compliance and avoid potential legal challenges.
Source: Blockworks
