Elizabeth Warren: Looks like Binance lied to lawmakers; SEC Chairman says crypto companies are deliberately breaking the law; The judge in the FTX bankruptcy case promised to keep control of $7.3 billion.
Massachusetts Senator Elizabeth Warren and Maryland representative Chris Van Hollen said in a letter to US Attorney General Merrick Garland that Binance may have made a false statement.
Allegedly, Binance may have made false statements, including whether its American subsidiary BinanceUS is truly a separate entity. The Securities and Exchange Commission (SEC) claims that the US company and Binance’s global presence, which should not allow Americans to trade, are not independent of each other. The SEC filed a 136-page complaint in federal court on Monday.
Binance representatives have not yet responded to requests for comment. The Justice Department declined to comment.
Binance and SEC
In March, Warren, Van Hollen, and Roger Marshall, a Republican from Kansas, requested information about the relationship between Binance and BinanceUS. They also requested a lot of financial data. In response, Binance said the two companies are “separate entities”, making compliance a priority.
In their letter Wednesday, the legislators stated that the responses were intended to inform the legislative process of Congress, with the following words:
Binance and Binance.US appear to have undermined this important investigation and legislative process by providing Congress with false and misleading information.
Binance chief strategy officer Patrick Hillmann signed the company’s 14-page response to the March investigation. This response described the company’s efforts to develop its compliance program, but gave little detail about its financial situation.
In the SEC complaint, Binance and its Chief Executive Officer claimed that Changpeng Zhao violated many securities rules, mishandled client funds and misled investors.
The SEC also said that the international company and Zhao are closely involved in running the US-based business. The SEC has requested a temporary restraining order to freeze certain assets as part of its lawsuit.
Previously, state regulators in Texas also expressed concerns about the independence of Binance and BinanceUS from each other.
SEC Chairman says crypto companies are deliberately breaking the law
SEC Chairman Gary Gensler believes crypto companies are acting deliberately to break the law, Reuters reported.
Gary Gensler denied allegations that he was trying to crush the crypto industry, claiming that many companies in the ecosystem made a “calculated economic decision” to break the law.
Speaking at the Piper Sandlar conference in New York, Gensler reiterated that the vast majority of cryptocurrencies are securities and must be registered with the SEC. He also underlined that this means that crypto companies must also comply with securities laws.
“Don’t beleive the names in the crypto market when they say that there is no “fair warning” that their current actions on Twitter or on television may be illegal. They may even have made an economic decision by calculating this risk as the cost of doing business.”
Gary Gensler on target of the crypto industry
The SEC’s lawsuit against both Binance and Coinbase, one day apart, caused the crypto industry to react to Gary Gensler. Gensler’s past being a crypto advocate was also among the key agenda items of the crypto community.
Coinbase CEO Brian Armstrong is among the most prominent names targeting Gensler. The company has long accused the regulator of “regulating through the app”.
However, Armstrong stated that the Coinbase and Binance case are completely separate cases. According to him, the only reason for comparing the two cases is that the cases were opened one day apart.
Judge in FTX case pledges $7.3 billion
The judge in the FTX bankruptcy case promised to keep control of $7.3 billion, Bloomberg reported.
These words of Judge John Dorsey could be bad news for the Bahamas liquidators.
Dorsey made a decision in favor of the restructuring advisors who took over the stock market after the collapse of FTX.
Since the stock market crash, debates have raged over who has rights over FTX’s assets.
Dorsey said:
“Under no circumstances will I defer a fundamental matter in a bankruptcy case to a foreign court. Only I have access to the assets.”
A liquidator in the Bahamas had sought permission from Dorsey to bring certain legal matters before a Bahamian judge. FTX advisors, on the other hand, argued that this attempt was made to seize the company’s assets in the USA.
Dorsey told the liquidator that he will make his final decision on June 9.
Based in the Bahamas, the FTX Digital Markets department claims that the assets of FTX.com are theirs.
