Binance SEC lawsuit could dent crypto exchange’s global plans
The United States Securities and Exchange Commission filed a lawsuit against Binance along with its U.S. platform and CEO Changpeng Zhao on June 5 in a Washington, D.C. federal district court for allegedly violating securities laws and offering unregistered securities.
The U.S. regulator has accused the crypto exchange of offering unregistered securities in the form of its now-paused Binance USD BUSD $1.00 stablecoin and its native token BNB
BNB 
$240 . The SEC also deemed its Simple Earn and BNB Vault products and its staking program as violations of securities law.
The SEC further alleged that Binance.US and its legal company, BAM Trading, failed to register as an exchange, broker or clearing agency and named Zhao as a “controlling person.” Although Binance has maintained throughout that the global entity, as well as the U.S.-based crypto platforms, are independent, the lawsuit alleged that the funds from the Biance global platform and Binane.US were co-mingled on multiple occasions. The suit also listed nine crypto tokens trading on the platform as securities — Solana
SOL $17 , Cardano ADA 
$0.290 , Polygon MATIC $0.6558 , Filecoin FIL $3.92 , Cosmos ATOM $9.03 , The Sandbox SAND $0.42 , Decentraland MANA $0.37 , Algorand ALGO $0.13 , Axie Infinity AXS $5.35 and Coti (COTI).
The SEC lawsuit, which levies 13 charges against the crypto exchange, its U.S. entity and the CEO, came within weeks of a Reuters report alleging the exchange was comingling customer funds.
The report alleged that the crypto exchange mixed its corporate revenue with customer funds in 2020 and 2021 and that the commingling occurred on a daily basis.
Reuters cited three insiders with knowledge of the crypto exchange’s finances and further claimed that the majority of commingling had occurred on accounts held at now-bankrupt Silvergate Bank, with amounts reaching the billions of dollars.
The report also claimed that many of the Silvergate accounts involved in comingling were linked to Zhao. At the time, Binance had refuted the claims and called it a conspiracy theory, only for the SEC to include those accusations in their lawsuits just a few weeks later.
Binance refuted the accusations made by the SEC in the lawsuit in a blog post and claimed that the onus falls on the SEC for not offering any clear regulatory guidelines for crypto platforms in the United States.
The SEC lawsuit also came within months of another lawsuit against the crypto exchange and CEO Zhao by the United States Commodity Futures Trading Commission on March 27. The CFTC lawsuit had alleged violations of derivatives law and failure to register with the required authorities.
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The SEC lawsuit might have taken many by surprise even though the security regulator has been investigating the crypto exchange since early 2022.
The SEC’s social media post, highlighting an insider message from Binance’s chief compliance officer from 2018, further raised eyebrows.
Binance launches regulated platform in Kazakhstan amid troubles in the West
Global cryptocurrency exchange Binance announced the launch of a regulated digital asset platform in Kazakhstan amid growing regulatory troubles in the West. The launch of the new platform was announced at a press event on June 20, 2023, in the presence of representatives of Kazakhstan’s banking industry and Binance Kazakhstan’s leadership.
The cryptocurrency exchange obtained an in-principle approval to operate in Kazakhstan in August and a permanent license to offer a digital asset platform and provide custodial services at the Astana International Financial Center (AIFC) in the country from the AIFC Financial Services Authority in October last year.
The new platform will offer a slew of crypto and fiat-focused services for Kazakhstani users, including exchange and conversion services, deposit and withdrawal of fiat, and custody of crypto assets.
The banking services will be offered by Kazakhstan’s Freedom Finance Bank bank, which will allow the new digital asset exchange users to transfer fiat funds to their accounts on the platform. There are two fiat channels available to deposit and withdraw at present namely bank cards and bank transfers via Freedom Finance Bank.
Binance Kazakhstan general manager – Zhaslan Madiyev told Cointelegraph that their progress in Kazakhstan goes beyond the digital asset platform and added:
“Today we launched a local crypto exchange Binance in Kazakhstan integrated with the bank channel. This is the first such project in the region. Binance Kazakhstan is going to adopt Binance’s best practice for their further deployment on a regional scale. In particular, we intend to develop the human capital of the country and the industry, so that future specialists and experts in blockchain can create their own projects and products for the further development of the entire industry and its gradual introduction into the daily lives of citizens”
The latest move for the leading crypto exchange by trading volume comes amid growing regulatory troubles in the United States and several European countries. Binance is currently embroiled in a U.S. Securities and Exchange Commission lawsuit and a lawsuit from the Commodity Futures Trading Commission.
Binance, Binance.US and CZ allege SEC made ‘misleading’ statements on exchange assets
Lawyers representing United States-based crypto exchange Binance.US, global exchange Binance Holdings Limited and Binance CEO Changpeng “CZ” Zhao have filed a motion alleging the U.S. Securities and Exchange Commission (SEC) misled the public in statements issued over an ongoing securities lawsuit.
In a June 21 filing in the U.S. District Court for the District of Columbia, the legal teams for Binance, Binance.US and CZ claimed the SEC had made “misleading” statements in a June 17 press release and filed a motion for the financial regulator to comply with “applicable rules of conduct.” The filing referred to SEC Enforcement Director Gurbir Grewal claiming CZ and Binance could “commingle customer assets or divert customer assets as they please” and an order requiring all parties involved in the lawsuit to return to the United States.
“The SEC has no evidence that BAM [Binance.US] customer assets have been dissipated, commingled or misused in any way,” said the June 21 filing. “The SEC’s press release also appears to be designed to introduce unwarranted confusion into the marketplace, which could have the effect of harming BAM customers rather than protecting them. It also risks tainting the jury pool with misleading descriptions of the evidence concerning the Defendants.”
Binance faces scrutiny in Brazil, exec summoned to testify before Congress
Deputy Alfredo Gaspar, a member of the Brazilian Chamber of Deputies, has requested the summoning of Guilherme Haddad, the director of Binance Brazil, to appear before the Brazilian parliament as part of an ongoing Parliamentary Commission of Inquiry (CPI) investigation into alleged pyramid schemes in the country.
The June 21 request will be voted on by members of the CPI on June 27.
According to a translation of the Brazilian news outlet Portal do Bitcoin, if the vote is approved, Haddad will be summoned to appear before the Brazilian Chamber of Deputies if the vote is approved. This development comes amid a global regulatory crackdown on the largest cryptocurrency exchange. Binance has faced scrutiny from authorities in the United States, France, the Netherlands, the United Kingdom and Brazil, underscoring international attention on the company.
Furthermore, the deputy claimed that Binance was utilized by pyramid schemes in the country to facilitate asset transfers.
He said:
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“Hence, it is vital to understand Binance’s operations, its association with B Fintech, and its involvement with companies facing legal action for harming Brazilian consumers, as this strongly links Binance to the ongoing investigation.“
Authorities in the South American nation explained that the intent for summons is due to the fact the company is facing the scrutiny mentioned above from regulators worldwide. In Brazil, Binance is also being investigated by the Federal Prosecutor’s Office and Federal Police. The cryptocurrency exchange has allegedly been helping clients evade a stop order on cryptocurrency derivatives investments.
Related: Binance, Binance.US and CZ allege SEC made ‘misleading’ statements on exchange assets
The Securities and Exchange Commission of Brazil has already been pressing Binance to stop offering Bitcoin futures products to Brazilian customers, according to a previous report from Portal do Bitcoin.
Binance did not immediately reply to a request for comment from Cointelegraph by the time of publication.