Introduction
The SEC (Security and Exchange Commission) filed 13 charges against Binance-Us, Binance.com and CZ (CEO of Binance)[ SEC V/S BINANCE ]. These are very serious allegations as we have seen its effect on the price of bitcoin as it fell by almost 7%. And it also broke the 200 weekly moving averages which were acting as a great support for Bitcoin.
SEC’s Unique Approach in Tweeting Against Binance
The charges this time, as we know the charges against Coinbase and Binance before, seems different as the SEC tweeted against Binance in a very different format, may be they knew that Binance is very heavy and the world’s Largest crypto exchange.
Initial News Break and Response from Binance CEO.
When this news initially broke it was not the tweet and but the information was given by Bloomberg, in reply CZ (Binance CEO), replied by quoting up 4 (basically implying it is a FUD) in tweet he mentioned that our team is up to it
and suitable answer will be given . But later the SEC tweeted about these allegations by giving a link to a document in which they filed 13 allegations against Binance.
CZ’s Tweet and Call for Unity
After the document came out CZ twitted “Strong together” requesting investors to come together, community needs to come together, and we need to fight this. And in the end this news came true that SEC charged allegations against them.
Governments’ Objectives in Regulating the Crypto Industry
As all governments know that they can’t stop Crypto industry from growing, so by applying these types of allegations the main target of governments is to control these types of transactions and investments (main in focus points are control in and out of crypto transactions i.e. peer to peer, cash to crypto, crypto to cash, fiat to crypto etc) and to control these by individuals they need to control exchanges by applying regulations on them.
Severity of the Allegations Against Binance
So it was expected that allegations were there to come, but here the allegations are very Sevier as they are telling that Binance has done too much wrong thing with the peoples by using their platform (i.e. Binance.com and Binance-Us) over the period of time. More important thing is that thy SEC told that CZ and the Binance Team always there to find the loop holes in the regulations of SEC to operate illegally in US(means they didn’t wanted to take any license). As they registered “Bam Trading Services Inc.” (In which more than 40% stakes are holed by CZ) doing business as Binance-US is a cryptocurrency exchange.This company helps US citizen’s to buy Varios Crypto Currencies on Binance-Us.
Here are the Allegations Filled by SEC against Binance-US
1) The SEC alleges that ,Binance and CZ Openly Claimed as US citizens were restricted from doing transactions on Binance.com, they secretly allowed high value US customers to trade on Binance.com. Also SEC alleges that, while CZ and Binance claimed that for US citizens they have built a new trading Platform i.e. Binance Us but secretly used Binance.US as a separate, independent trading platform for US investors. Covertly controlled the operation of the US platform.
2) SEC also alleges that CZ and Binance also controls the assets of the customers , they decreses the value of assests and divert them as they want.
3) ccording to the SEC’s complaint, BAM Trading and BAM Management US Holdings, Inc. (“BAM Management”) are accused of deceiving investors by providing false information about the trading controls on the Binance.US platform. Additionally, the complaint alleges that Sigma Chain engaged in manipulative trading practices to artificially increase the platform’s trading volume. The defendants are also accused of concealing the pooling of billions of dollars in investor assets and transferring them to a third-party entity called Merit Peak Ltd.., also owned by CZ.
4) The complaint also alleges violations of important registration-related provisions of the federal securities laws:
• Binance and BAM trading with operations of unregistered national securities exchanges, broker dealers and clearing agencies
• Binance and BAM trading with an unregistered offering and sale of Binance’s own crypto assets, including BNB and their stable coin BUSD, certain crypto-lending products, and a stake-as-us. A-Service Programs
• CZ as a control person for the operations of Binance and BAM Trading as unregistered national securities exchanges, broker-dealers and clearing agencies.
5) Through thirteen charges SEC said CZ and Binance are spreader of Web Related Fraud, Conflict of Interest, Lack of Disclosure and Willful Evasion of Law.
6) CZ and Binance were alleged that they misled the investors about their risk controls and tainted trading volumes, and also did not disclosed that who is running this platform.
7) According to the allegations, CZ allegedly misrepresented the existence of controls sufficient to comply with US securities laws. Intriguingly, it is claimed that CZ deliberately circumvented these controls behind the scenes to enable the sale of securities at inflated prices to US customers on the Binance platform. In light of these allegations, the SEC cautions the public to exercise extreme caution and avoid investing their hard earned money on these illegal platforms.
8) SEC also alleges that CZ and Binance Knew the rules and regulations of SEC but they always wanted to find out the loop holes of the system and by using them they were running an unregistered trading platform by risking the money of US Customers.
Unsuccessful Attempts to Restrict US Investors from Accessing Binance.COM
According to the complaint filed by the SEC, CZ and Binance established BAM Management and BAM Trading in September 2019 with the intention of evading US federal securities laws through a complex plan claiming that BAM Trading operated independently of Binance.US operate the platform and US customers were not able to access. Binance.com platform. The complaint alleges that, in fact, CZ and Binance maintained substantial involvement and control of the US entity and that behind the scenes; CZ conspired to allow Binance.com continued access to a number of high-value US customers and Directed Binance to hide. In one instance, Binance’s chief CZ Claimed in message to his colleague that, “we are operating an unliscenced SEC exchange In United states bro”
Conlusion:
the charges filed by the SEC against Binance-US, Binance.com, and CZ are serious and indicate that the exchange and its CEO have engaged in unlawful activities, including misleading investors, evading regulations, and operating unregistered trading platforms. These allegations have significant implications for the crypto industry and highlight the ongoing efforts by governments to exert control over cryptocurrency transactions and investments.
SEC V/S BINANCE FAQ’S
1) How did the news of the charges initially come to light?
Answer: this news initially broke it was not the tweet and but the information was given by Bloomberg, in reply CZ (Binance CEO), replied by quoting up 4 (basically implying it is a FUD) in tweet he mentioned that our team is up to it and suitable answer will be given . But later the SEC tweeted about these allegations by giving a link to a document in which they filed 13 allegations against Binance.
2) What was CZ’s initial response to the allegations?
Answer: Initially CZ, tweeted that is a FUD, later when it was confirmed that these are true then requested community to come together and support Binance.
3) How have these charges affected the price of Bitcoin?
Answer: These are very serious allegations as we have seen its effect on the price of bitcoin as it fell by almost 7%. And it also broke the 200 weekly moving averages which were acting as a great support for Bitcoin.
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