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- The Crypto Compass Issue #22
The Crypto Compass Issue #22
SEC lawsuit against Binance and Coinbase!? Read it in our weekly newsletter now! Brought to you by BitcoinWalletSG.
Hey Friends!
Hop aboard as we set sail once again on the unpredictable seas of crypto with The Crypto Compass, your trusted chart for navigating the dynamic world of cryptocurrencies. We've got some key updates this week, so without further ado, let's delve right in! The U.S. Securities and Exchange Commission (SEC) has filed lawsuits against Binance and Coinbase, two major cryptocurrency exchanges.
Binance
The SEC filed 13 charges against Binance, the largest crypto asset trading platform in the world, and its founder Changpeng Zhao. The charges include operating unregistered exchanges, broker-dealers, and clearing agencies, misrepresenting trading controls and oversight on the Binance.US platform, and the unregistered offer and sale of securities.
The SEC alleges that despite publicly claiming to restrict U.S. customers from transacting on Binance.com, Zhao and Binance secretly allowed high-value U.S. customers to continue trading on the platform. It also alleges that Binance and Zhao secretly controlled the operations of Binance.US, despite claiming it as a separate, independent trading platform for U.S. investors.
Additionally, the SEC claims that Zhao and Binance exercised control over the platforms' customers' assets, allowing them to commingle customer assets or divert them as they pleased, including to an entity owned and controlled by Zhao. They also allegedly misled investors about non-existent trading controls over the Binance.US platform and engaged in manipulative trading that artificially inflated the platform's trading volume.
Coinbase
The SEC has charged Coinbase for operating as an unregistered securities exchange, broker, and clearing agency, and for the unregistered offer and sale of securities in connection with its staking-as-a-service program.
According to the SEC, since at least 2019, Coinbase has made billions of dollars unlawfully facilitating the buying and selling of crypto asset securities. It intertwines the traditional services of an exchange, broker, and clearing agency without having registered any of those functions with the Commission as required by law, allegedly depriving investors of significant protections, including inspection by the SEC, recordkeeping requirements, and safeguards against conflicts of interest.
Impact on Cryptocurrency Industry
The recent actions by the SEC against Binance and Coinbase represent a significant regulatory move in the world of cryptocurrency exchanges. These allegations underscore the tension between the innovative, fast-paced world of cryptocurrencies and the established legal and regulatory frameworks meant to protect investors.
The charges highlight the importance of adhering to securities laws, even in new and evolving financial contexts. The potential implications of these charges could be far-reaching, possibly affecting investor confidence, business operations, and the broader market dynamics within the cryptocurrency sector. It remains to be seen how these charges will be resolved and what impact they will ultimately have on the future of cryptocurrency exchanges and the broader cryptocurrency market
And before we set our sails away, we've got an exciting resource to share with you! We've prepared a educational video on the basics of crypto wallets. This video will guide you through everything you need to know as a beginner.
So, why wait? Click the link to watch the video, and don't forget to share it with your fellow crypto explorers!
Happy voyaging, and see you next week!
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