The investigation into Binance.US by the U.S. Securities and Exchange Commission (SEC) has been ongoing since at least 2020, according to recent court filings. The documents reveal that the SEC has uncovered evidence of hundreds of millions of dollars in profiteering by the popular cryptocurrency exchange.
On Monday, the SEC filed a lawsuit against Binance’s U.S. and global entities, as well as CEO Changpeng “CZ” Zhao, alleging that they operated an unregistered securities exchange by enabling users to trade cryptocurrencies. In response, the regulatory body has made attempts to freeze Binance.US’s assets.
Those who have been following Binance.US closely might wonder what this means for the future of the exchange. While SEC’s actions put into question the legitimacy of Binance’s operations, the exchange has maintained that they have engaged with the SEC in good faith for nearly two and a half years. They argue that the lawsuit is “baseless… unjustified by the facts, by the law, or by the Commission’s own precedent.”
A court filing by SEC lawyer Colby Steele indicates that the designated officials were ordered to take testimony regarding the investigation on August 17, 2020. Among other issues, the investigation pertained to possible violations of federal securities laws by BAM Trading Services Inc., which operates under the name Binance.US.
More details regarding the exchange’s financial affairs have been brought to light by a filing from SEC accountant Sachin Verma. Over a period of slightly more than four years, BAM Trading reportedly generated $411 million in revenue and $225 million in gross profit. Since BAM Trading is not a publicly-listed company, its financial matters are usually kept under wraps.
Supporters of Binance.US might argue that the exchange has been proactive in addressing regulatory concerns and cooperating with the SEC. Critics, however, contend that operating an unregistered securities exchange puts the cryptocurrency space at risk and undermines the trust that users place in these platforms.
As more information emerges about the case, the contrasting viewpoints on the legitimacy of Binance.US’s operations come into sharper focus. It remains to be seen how the SEC’s actions will impact the exchange’s future and the broader cryptocurrency industry, but one thing is certain: this development has drawn widespread attention and will undoubtedly spark conversations about the need for more stringent regulation and transparency within the crypto space.