(RightWing.org) – Cryptocurrencies like Bitcoin can be very volatile and carry a lot of risk for people and their money. The United States Securities and Exchange Commission (SEC) claims that some of the exchanges “may not be complying with applicable law, including federal securities laws.” Now they and the Commodity Futures Trading Commission (CFTC) have filed a series of lawsuits against the crypto exchanges Coinbase and Binance and its Chief Executive Officer (CEO) Changpeng Zhao for the way they had been handling billions of dollars of investors’ money.
Binance/Zhao
According to the complaint filed by the SEC on June 5 in the United States District Court for the District of Columbia, the defendants put an intentional plan in place “to escape the registration requirements of the federal securities laws….” They claim to have an admission of this in a statement provided to them by the company’s former Chief Compliance Officer (CCO), Samuel Lim.
Zhao was born in China and actually began Binance there, but pulled out when Beijing began a crackdown on digital money that was not controlled by the central government. Now, according to the SEC lawsuit, he controls a series of companies incorporated in different countries around the world in an alleged attempt to hide the funds that he took in to enrich himself at the peril of the investors.
The government alleges that by 2021, Binance became “the largest crypto asset trading platform in the world” when it was moving assets valued at over $9.5 trillion. The court documents also claim the company earned at least $11.6 billion from June 2018 through July 2021, primarily from the transaction fees it charged. The SEC also claims that Zhao put $62.5 million into his own pocket from one of the corporation’s bank accounts in the period of October 2022 to January 2023.
In a Twitter post, Binance.US claims it has been working with the SEC “in good faith” for better than two years in an effort to work out “a clear, practical regulatory framework [for] digital assets.” The crypto company also believes the actions taken against it and other crypto companies are an attack where the government is looking for “a near eradication of our industry.”
Coinbase
On June 6, the SEC filed a lawsuit against another crypto exchange company known as Coinbase, which allows its customers to directly trade in 254 digital assets, and through its “Wallet” program, allows investors access to more than 16,000 third-party virtual currencies.
According to the court documents, Coinbase allows people who are holding cryptocurrencies to pool their monies into “crypto staking,” which essentially keeps the whole mysterious blockchain validation process going, and they specifically market it as an investment opportunity, which is one of the actions the SEC was created to oversee. However, these crypto exchanges claim that they do nothing that would fall under government oversight, but the feds are essentially calling them a bunch of ducks. As in the old adage, if it walks like a duck and it talks like a duck, then it must be a duck.
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