In an unexpected turn of events, leaked chat between employees at Binance has got the internet by storm. Notably, such chats coming from the firm’s executives could have a significant part in the ongoing case against the United States Securities and Exchange Commission (SEC).
As the exchange prepares to fight the legal battle with SEC, an internal chat between Sam Lim, former compliance lead at Binance and Alvin, previous head of business development has been leaked. Within minutes of the leak, the chat was trending on Twitter and gained the attention of significant entities.
According to a Twitter thread posted by Adam Cochran, referring to these chat screenshots as evidence in the SEC’s lawsuit, the two former executives can be seen mocking the exchange’s compliance to regulation several times. The chats also explicitly state that the exchange has functioning as an unregistered entity and have been promoting ways to circumvent sanctions.
Further, the tweet also features a translated recording of Binance’s CEO, Changpeng Zhao (CZ), where he discusses the priorities of the firm to reduce their losses and save themselves from trouble from the US regulators. It adds CZ specifically noting the 2019 blocking of US users and how they should approach slowly getting US users to use foreign KYC and ignore the IP addresses, and slow the roll out of the news.
According to media reports, this has also caught the attention of the firm’s CEO and he rolled out a strong message for the workers. He warned the staff that they should consider other career options if they are not satisfied with the company.
Referring to Cochran’s tweets, CZ wrote a letter to his employees where expressed that the SEC’s use of the internal chats as evidence is absurd. However, he also warned employees that:
Everything you say could end up in court (or on the internet) some day.
In his letter, he penned his feelings that the leaked chats have possibly done a lot of damage to the company. Further, he urged the employees not to waste their energy if they don’t like the job at Binance. Zhao wrote:
More importantly, if you are not satisfied with working at Binance (or any company), you should talk to your manager and seriously consider your career options.
On Monday, the SEC sued Binance for unregistered offers and sales of the stablecoins – BNB and BUSD, its services namely the Simple Earn and BNB vault products, and its staking program. Additionally, the regulator claimed that Binance failed to register its online platform as an exchange or a broker-dealer clearing agency and demanded permanent suspension of Binance and CZ from further activities, disgorgement of ill-gotten gains with interest, and financial penalties.
Further, the SEC also filed an emergency motion to freeze assets of Binance.US citing significant concerns. While the firm called this motion “unwarranted” and a move to enjoy an upper hand during the lawsuit hearing, it announced its decision to delist BTC and BUSD advanced trading pairs and not just that it has also announced to halt all the USD deposits and withdrawals from June 13.
While the regulator which has largely been known to be anti-crypto has received backlash regarding the lawsuit, recent events cast doubts on Binance’s legitimacy and standing in the case. With the services being affected one after another and top executives being so explicit about non-compliance, it makes the case all the more important. However, it is only a matter of time that the cards unfold and the truth unveils.