The S.E.C. Appeals against Binance’s Coverup of U.S. Trading on an Exchange Off-Gauge
U.S. customers are allowed to use a platform run by Binance to trade on an exchange which is supposed to be off limits to U.S. investors.
So far, the biggest target has been FTX, a company that collapsed in spectacular fashion and faces a slew of criminal charges that threaten to send its founder and former CEO, Sam Bankman-Fried, to prison for over 100 years.
Since FTX went out of business, Binance’s share in the market has grown vastly and has become the focus of law enforcement and regulators around the world.
In March, the Commodity Futures Trading Commission accused the company of violating the Commodity Exchange Act.
According to today’s filing, the company and its chief executive covertly allowed high-value U.S. customers to trade on its international exchange.
Two subsidiaries, BAM Trading and BAM Management, supposedly controlled the U.S. operations independently, but according to the S.E.C., that firewall has been more permeable than the company has let on publicly.
Gensler has made a case to register with the S.E.C. In today’s filing, the S.E.C. says Binance failed to do that.
The defendants “chose not to register, so they could evade the critical regulatory oversight designed to protect investors and markets,” the S.E.C said, in its suit.