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Binance Will Likely Face Criminal Charges in the US: SEC Veteran

Ruholamin Haqshanas

Published: June 13, 2023 10:13 pm

SEC veteran John Reed Stark believes the United States Department of Justice will likely file criminal charges against Binance if it hasn’t already. The legal expert claimed that the federal executive department could most likely charge the exchange with money laundering.

DOJ Could File Money Laundering Charges Against Binance

Binance, the world’s largest cryptocurrency exchange by market cap, might soon face additional regulatory scrutiny in the US. According to John Reed Stark, former Chief of the SEC Office of Internet Enforcement, there is an increasing probability that the DOJ will file charges against Binance.

In a Monday tweet, Stark said that there “exist a litany of indicators that US DOJ will file, or has already filed under seal, a Binance-related criminal indictment.” He added:

“To me, the CFTC and SEC complaints read more like criminal indictments, replete with allegations of fraud, deception, obstruction of justice and money laundering.”

Stark argued that none of the cases filed by the SEC or Commodity Futures Trading Commission “intensely” focus on money laundering. “That is the prosecutorial space that has been carved out and reserved for a U.S. DOJ criminal prosecution relating to Binance,” he added.

He also mentioned that in its Memorandum of Support, the SEC said it has “been widely reported that Binance and Zhao are under investigation by criminal authorities in the United States.” Stark noted that the SEC works with criminal prosecutors and FBI agents but restrains from disclosing additional details. He concluded:

“My take is that U.S. DOJ is working with the SEC, CFTC and multiple informants/whistleblowers, and the next axe to fall is the filing, or unsealing of, Binance-related criminal charges. Fail not at your peril.”

SEC Filed 13 Charges Against Binance and its CEO

Last week, the SEC filed 13 charges against Binance, the world’s largest cryptocurrency exchange, and its CEO, Mr. Changpeng Zhao. The commission claimed Binance offered unregistered securities in several cryptocurrencies, including BNB and the stablecoin BUSD.

The SEC also alleged that Binance undermined its compliance program and allowed US-based customers to access the exchange’s international platform. The company’s former chief compliance officer even internally admitted to the wrongdoing by writing to a colleague that they are “operating as a ******* unlicensed securities exchange in the USA.”

Furthermore, Binance is accused of being set up to “commingle customer assets or divert customer assets as they please, including to an entity Zhao owned and controlled called Sigma Chain.”

The SEC complaint came as the company was already sued earlier this year by CFTC. In late March, the watchdog alleged that Binance “chose to knowingly disregard applicable provisions of the CEA while engaging in a calculated strategy of regulatory arbitrage to their commercial benefit.“

Meanwhile, Binance is not the only crypto company that has attracted the ire of US regulators; the SEC also sued Coinbase, the largest US-based cryptocurrency exchange, last week. Moreover, the commission has taken enforcement action against crypto exchanges Kraken and Bittrex and crypto lending platform Nexo so far this year.

This article originally appeared on The Tokenist