- The SEC chairman claimed that crypto exchanges are under his authority as most of the tokens are securities
- Subsequently, Binance’s CEO addressed the SEC lawsuit to his employees in an email
The U.S. Securities and Exchanges Commission (SEC) has been in the spotlight along with two prominent crypto entities since the regulator filed separate successive lawsuits. Earlier this week, the commission took action against Binance – the largest crypto exchange, and Coinbase – a leading US crypto exchange. The commission alleged that both crypto entities violated securities laws.
In addition, the commission alleged that Binance was mixing customer funds while Coinbase was mixing its companies. The SEC also labeled a range of cryptocurrencies as securities in both lawsuits. Since then, Binance.US has removed some of its listed tokens and its OTC trading platform. Meanwhile, Coinbase has stood firm and is ready to go against the commission.
Binance’s CEO speaks to employees about the lawsuit
Binance CEO – The email from Changpeng Zhao, aka CZ, to his employees was leaked on June 8. In it, he addressed the SEC lawsuit against him, the company and its US branch – Binance.US. The CEO warned that the first thing the regulators are after is the chat logs of the company’s employees. He also claimed that these chats could one day appear in court or on the internet.
The warning came after the SEC cited some chat logs between Binance’s top executives. In the chats, the executives spoke about dumping BNB and the risks of holding it, and other regulatory related matters. Zhao claimed that these chats were “extremely damaging to our reputation (and theirs)”. The CEO also stressed that the company itself does not monitor chat logs, further claiming that this was also the first for him. He closed with proverb,
“While we’ll still see other chat logs of disgruntled employees ranting, or other things we (or I) weren’t careful to say in the past, they’ll also find that we continue to hold ourselves to a high ethical standard and, more importantly, we have always done everything we can to protect our users. We will never compromise on that.”
SEC Chairman Provides Advice on the Current Status of the Crypto Market
In the latest development, SEC Chairman – Gary Gensler – claimed that a “vast majority of crypto tokens pass the investment contract test,” also known as the Howey test. And he added, this required crypto security publishers to register or comply with the waivers at the Piper Sandler Global Exchange and FinTech Conference. Speaking of the current crypto market, he said, it was “Hucksters. scammers. scammers. Ponzi schemes. The public lined up at bankruptcy court.”
Gensler also took issue with crypto leaders who claimed there was ambiguity about the legality of the business. He said, “They may have made a calculated economic decision to take the risk of enforcement as the cost of doing business.” The SEC chairman further stated that “not liking the answer is not the same as a lack of clarity.”