SEC Lawsuits Against Binance and Coinbase: Unraveling Conflicts

9 Jun 2023

Hi Traders, Investors and Speculators of Charts📈📉

In recent developments that have rocked the cryptocurrency industry, the U.S. Securities and Exchange Commission (SEC) has filed lawsuits against major cryptocurrency exchanges Binance and Coinbase. These legal actions stem from alleged violations related to registration requirements and investor protection. Additionally, a potential conflict of interest has emerged, as former Binance job applicant Garry Gensler now serves as the head of the SEC. This write-up aims to shed light on the sequence of events, the accusations faced by both exchanges, and the implications for the crypto market.

A - Binance Faces SEC Charges

The SEC filed a lawsuit against Binance, one of the world's largest cryptocurrency exchanges, and its CEO Changpeng Zhao (CZ), accusing them of violating U.S. securities laws. The charges revolve around Binance offering and selling cryptocurrency derivatives to U.S. investors without being registered as a securities exchange.

B - Coinbase Sued by the SEC

The SEC also sued Coinbase, a prominent U.S.-based cryptocurrency exchange, alleging that it failed to properly register its planned lending product, Coinbase Lend. The SEC argues that the lending product qualifies as a security, and Coinbase should have registered it accordingly. However, Coinbase has filed a counter lawsuit aiming to prove how many times they have tried to reach out to the SEC for clarity.

C - Conflict of Interest: Gensler's Connection to Binance

Prior to joining the SEC, Garry Gensler reportedly applied for a job at Binance but was rejected. Soon after, he assumed his role as the chairman of the SEC. This situation has raised concerns about potential conflicts of interest, as Gensler now oversees the regulatory actions against Binance.

The SEC are basing their entire case of a few key factos:
❗ Securities laws mandate that companies offering securities or related products to the public must register with relevant regulatory authorities. Failure to do so can result in legal action.
❗ Investor Protection: Regulatory bodies aim to safeguard investors' interests by ensuring transparency, disclosure of information, and adherence to applicable regulations.
❗Cryptocurrency Derivatives are still derivatives: Financial contracts whose value is derived from an underlying cryptocurrency, such as futures contracts or options.
❗Cryptos are Securities: Financial instruments, including stocks, bonds, or investment contracts, that represent ownership or participation in a company or enterprise.

Implications for the Crypto Market

The SEC's actions against Binance, Coinbase and Ripple signal increased regulatory scrutiny in the cryptocurrency space, highlighting the need for compliance with existing securities laws. However, it also points out how flawed the current system is as Garry Gensler basically has autonomy over decisions that may be conflict of interest. His actions are affecting the entire crypto space as well as stifling innovation since the SEC has been so negligent to work with the blockchain community for solutions. Not even to mention the shorts that were opened on both Binance and Coinbase just before the lawsuit news dropped, picked up by on-chain analysis as seen all over Twitter. This confirms and reiterates that politicians and other people in power have insider information on stocks, as was last seen with the Nancy Pelosi case.

💭Although this seems like an attack on blockchain, all of the above proves how desperately the world needs a new system that is unbiased, transparent and fair. With regulators desperately grabbing for strands of power in any way possible, it actually just strengthens the argument for blockchain and a cryptocurrency-based future.

And finally, from a trading perspective, these are some decent discounts, hence I'm labeling this post as long. I'll be bagging up because this is a steal for both Coinbase stock and BNBUSDT.


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Sauces:

Reuters: "SEC sues Coinbase over failure to register"
The New York Times: "SEC sues Binance over securities violations"
CNBC: "SEC sues Binance and CEO Changpeng Zhao"
Coin Telegraph: "SEC Gensler parallels Binance, FTX sued"
BBC: "US regulator sues Coinbase over interest-earning product"
CryptoSlate: "Coinbase seeks to withdraw staked ETH amid SEC lawsuit"
YouTube: "SEC sues Binance and Coinbase"
The Wall Street Journal: "SEC sues Binance and Coinbase: What the charges mean for crypto"

COIN BNBUSDT XRPUSDT PANCAKESWAP:NUTUSDT_9D4097 BNB

10 Jun 2023

Nota

I will update here as more news becomes available.

13 Jun 2023

Nota

Meanwhile, a crypto-friendly congressman in the US has proposed a bill to fire Garry Gensler.
“Today I filed the SEC Stabilization Act to restructure the SEC and fire Gary Gensler,” announced Warren Davidson (R-OH) on Twitter Monday.