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Former SEC Official Joins Binance.US Legal Team Amid Lawsuit Challenges

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TL;DR Breakdown

  • Binance.US hires former SEC enforcement official George Canellos to strengthen its legal defense against allegations of operating as an unregistered securities exchange.
  • The company vehemently denies the allegations, criticizes the SEC’s aggressive tactics, and suspends U.S. dollar deposits due to the regulatory actions’ potential impact on its business.

Binance.US, a United States-based cryptocurrency exchange, has made a strategic move to bolster its legal defense amid ongoing allegations of operating as an unregistered securities exchange. The company has reportedly hired George Canellos, a former enforcement co-director of the U.S. Securities and Exchange Commission (SEC), to join its legal team. Canellos, currently affiliated with the international law firm Milbank LLP, brings extensive experience and expertise in securities enforcement. This development comes as Binance.US faces legal challenges and strives to protect its assets from potential freezing.

Binance.US Responds to Allegations and SEC Lawsuit

In a recent court filing responding to the lawsuit initiated by the SEC, Binance.US vehemently denied allegations of failing to register as an exchange, broker, and clearing agency. The SEC had raised similar claims against Binance’s global exchange and Coinbase in subsequent filings. The regulatory body sought a temporary restraining order to freeze the assets of Binance.US, which prompted the company to take swift action in defending its operations.

Binance.US argued against the SEC’s motion, asserting that it should be denied as the proposed remedies would have severe consequences for the exchange’s business. The company criticized the SEC’s aggressive tactics, describing them as unduly burdensome and potentially crippling. These developments prompted Binance.US to suspend U.S. dollar deposits and potentially halt fiat withdrawals, citing the SEC’s actions as the main driver behind this decision.

In its court filing, Binance.US strongly refuted the SEC’s allegations of operating as an unregistered securities exchange. The company defended its position, asserting that the SEC’s proposed remedies would inflict significant harm on its business. Binance.US condemned the SEC’s aggressive tactics and subsequently suspended U.S. dollar deposits and potentially fiat withdrawals, attributing these measures to the SEC’s actions.

Industry Backlash and Calls for SEC Chair’s Removal

The SEC’s handling of crypto enforcement has come under fire from both lawmakers and industry leaders who perceive its approach as heavy-handed. Representative Warren Davidson recently introduced a bill calling for the firing of SEC Chair Gary Gensler, aiming to restructure the commission. Davidson’s proposal highlights the discontent within the industry and signals a pushback against what is perceived as overly aggressive regulatory measures.

Former SEC internet enforcement chief John Reed Stark commented on the situation, suggesting that Binance’s decision to hire Canellos indicates the company’s preparation for potential criminal prosecution. Stark emphasized the gravity of the allegations made by the SEC and the Commodity Futures Trading Commission (CFTC), hinting at the possibility of more significant legal consequences if criminal charges were pursued.

The industry backlash against the SEC’s crypto enforcement grows, prompting calls for SEC Chair’s removal. Former SEC official’s hiring by Binance.US suggests preparations for potential criminal prosecution amid serious allegations and legal consequences.

Conclusion

Binance.US has enlisted the support of George Canellos, a former SEC enforcement co-director, to bolster its legal defense team. The company is facing a lawsuit from the SEC, which alleges that it operated as an unregistered securities exchange. In response, Binance.US strongly denied the allegations and criticized the SEC’s aggressive tactics. Concurrently, there has been growing criticism of the SEC’s approach to crypto enforcement from lawmakers and industry leaders. Representative Warren Davidson has called for the removal of SEC Chair Gary Gensler through a proposed bill aimed at restructuring the commission.

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