SEC accuses Binance of laundering in US, CZ defends itself

SEC and CTFC against Binance. In our ultra-mediated society, where continuous news channels compete for scoops on social networks, one news item often tends to drive out another. Financial circles, especially crypto, is no exception to this phenomenon, and in litigation the gap between the time of it Justice and that off media is gigantic. While one case has not yet been officially adjudicated, it ispublic opinion already get an idea by reading the media and then move on quickly. But in this day and age, the procedures are progressing, the courts are working, and the law is trying to find a place for itself amid leaks and anonymous statements from sources close to the case according to the established formula. Today it is again Binance to respond to the charges of wash trade comes from The Wall Street Journal while the platform is already at odds with US regulators. Details to follow.

Did Binance Inflate Its Trading Volumes? The SEC suspects it

It all started again with an internal document to which The Wall Street Journal would have had access. Never stingy with a good scoop on Binance, this media claims that employees of the American part of the exchange would have exchanged writings about unorthodox transactions. This is what the report points to Sigma chaina Swiss-based trading company owned by Changpeng Zhao, allegedly made a large number of trading purchases/sales in order to swell volumes on the platform “using dozens of user accounts”.

The New York Business Daily cites, to reinforce its point, an academic study which confirms that almost 70% trading on crypto exchanges is False and falls under wash trade, that is, an artificial inflation of quantities. Problem ? This practice is of course complete illegal in traditional finance, but a legal void exists in the crypto sector due to lack of regulation.

CZ tirelessly tweets and retweets this message with each new accusation – Source: Twitter

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70,000 bitcoins change hands early morning…

Therefore, everything that is not illegal is necessarily legal? Not sure, and the US regulator intends to shed light on these events. And especially on these 70,000 bitcoins which would have changed hands one fine morning 2019 and about which ones CZ would have said: “it’s us i think”. Anyway, the teams off Binance responded to this article by denying all the accusations, as usual:

“We are convinced that the SEC’s allegations regarding wash trade are totally unfounded and based on a fundamental misunderstanding of the facts and a misinterpretation of the applicable law. »

At the same time, it is CFTC what other information has come to light Binance and its charismatic CEO. The second US financial regulator has indeed taken the exchange to court, but it appears to be about to counter attack according to a lawsuit published on July 24. Binance is actually asking for a dismissal of the complaint as well as an extension of the page limit in their memo, as read in the document.

It is now Justice who holds the cards and who will position themselves on all the charges weighing on the largest crypto platform in the world. For CFTC, Binance violated regulations on derivatives and unregistered trading activities in the United States. According to DRY, it would be a violation of securities legislation. As far as CZ and his team are concerned, the answer is always the same: it’s all R&D and the work continuese. To be continued !

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