Binance Exchange’s case with the United States regulator is likely to take another turn as a former official of the Securities and Exchange Commission (SEC) John Reed Stark has revealed a possible indictment from the U.S. Department of Justice (DoJ).
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Reed believes that the DoJ will file — or has already filed under seal — a Binance-related criminal indictment for money laundering.Â
More Criminal Charges Against Binance By DoJ
According to the Twitter post made by the 19-year SEC veteran on Sunday, “There exist a litany of indicators that U.S. DOJ will file, or has already filed under seal, a Binance-related criminal indictment.” Also, “To me, the CFTC and SEC complaints read more like criminal indictments, replete with allegations of fraud, deception, obstruction of justice and money laundering.”
In Reed’s opinion, the coming weeks will be a tumultuous one for the exchange as the DoJ will likely work with SEC and CFTC to unsealed all criminal charges against the exchange.
CFTC Charge Binance For Regulation ViolationÂ
The Commodity Futures Trading Commission (CFTC) filed a 76-page complaint against the leading cryptocurrency exchange Binance, charging the Chief Executive Officer (CEO) Changpeng Zhao and three others for violating several statuses and regulations. Binance’s former chief compliance officer, Samuel Lim was also implicated in the lawsuit for being an ally to Binance violation of federal regulation.
There was evidence that Lim was very well aware certain Binance customers “are here for crime.” In the same lawsuit, Zhao was accused of intentionally concealing the location of Binance executives’ offices, thereby avoiding regulation. Also, the exchange allowed U.S. residents to use the platform by engaging Virtual Private Networks (VPNs) to mask their location.
SEC Sues Binance And CEO Zhao
About two months after the CFTC complaint, the U.S. SEC filed a 136-page lawsuit against Binance and some entities for co-mingling billions of dollars in customers’ funds and secretly sending them to another company owned by CZ. This act was said to have put investors at risk.Â
“Like the CFTC action, the SEC also alleges that Zhao designed, implemented and engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law.” Markedly, this was similar to the allegations that brought down Bahamian-headquartered crypto exchange FTX and led to the resignation of Sam Bankman-Fried.Â
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