On Thursday, United States lawmakers commented on Binance in reference to its ongoing case with the Securities and Exchange Commission (SEC). The lawmakers asked the Department of Justice (DoJ) to investigate statements previously made by the firm and take action as deemed necessary.
According to sources, US senators Elizabeth Warren (Democrat, Massachusetts) and Chris Van Hollen (Democrat, Maryland) alleged that Binance and Binance.US made false statements to Congress in a letter. In the letter from March, Binance said that its global and U.S. companies are separate entities and that Binance.US is highly compliant with regulations.
Further, senators illustrated that the statements are false considering the SEC’s recent lawsuit against the exchange wherein the regulator has put some serious allegations on the exchange and its CEO Changpeng Zhao (CZ). The senators also relate to the case to agree with the SEC on how CZ helped customers evade geographic blocks.
The Democrat lawmakers added that Binance’s apparent dishonest response is very critical in the current scenario. They added that initially bipartisan regulators sought information to inform the formation of new laws but Binance and its US-based subsidiary “undermined the process.”
Towards conclusion, the senators asserted that Binance and Binance.US’s statements could have been in violation of the federal law giving the DOJ the power to impose fines and imprisonment on executives. However, sources suggest that Zhao and many other Binance executives are not citizens of the U.S., and as such, it is unclear to what extent the DOJ could take action against those individuals.
On Monday, the SEC filed 13 charges against the exchange, including 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 claims in its suit that Binance failed to register its online platform as an exchange or a broker-dealer clearing agency.
The SEC wants permanent suspension of Binance and CZ from further activities, disgorgement of ill-gotten gains with interest, and financial penalties. On the day following the lawsuit, the SEC also filed an emergency motion in US court to freeze assets of Binance.US to “prevent the dissipation of available assets for any judgment, given the defendants’ years of violative conduct, disregard of the laws of the United States.”
While the crypto industry in large have severely criticized this enforcement oriented approach of SEC, the regulator is firm on its stand and continued its act. On Tuesday, a day after Binance’s lawsuit, the SEC filed a lawsuit against Coinbase for violating federal securities laws and selling unregistered securities.
Notably, on the part of lawmakers, there has been an imminent divide in ideologies between the two political parties when it comes to crypto regulation. While Republican lawmakers are more crypto-friendly and criticize the SEC and its chief often, Democrats do the opposite. In fact, in a confidential piece it was found Democrat lawmakers were urged to support Gary Gensler, SEC chief, in his war against crypto.
In particular, Senator Warren is one of the staunch critics of cryptocurrencies and has often been found leading an anti-crypto agenda via proposed regulations. Additionally, her dislike for cryptocurrencies is to an extent that the senator chose to share a plan to “build an anti-crypto army” in the country.