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The SEC’s Situation with Binance and Coinbase Is Getting More and More Complicated

Follow me on twitter @Jacqmelinek for crypto news, memes and more.

Welcome back Chain reaction.

It’s been a pretty long week (and it’s not over yet).

Unless you live under a rock, you know that the US Securities and Exchange Commission opened fire on Monday and Tuesday, by suing the two largest cryptocurrency exchanges, Binance and Coinbase, corresponding.

It is important to note that the lawsuits are quite different, although both exchanges have faced securities law violations. In the case of Binance, the exchange and its CEO Changpeng Zhao as well as two other parties are facing 13 charges including lying to regulators about their activities.

Binance lawyers from Gibson Dunn and Latham & Watkins alleged that SEC Chairman Gary Gensler offered to serve as an advisor to their crypto exchange in 2019, when Gensler was teaching at the Sloan School of Management of the Massachusetts Institute of Technology, a filing on Wednesday stated.

The SEC investigations into Binance begin in 2020 and 2021, about a year after Gensler and Zhao are said to have last spoken.

Given the claimed relationship between Gensler and Binance and Zhao, the exchange’s attorney has asked the SEC to withdraw any action related to the company, but the attorney said they have not yet received a response from the agency. mandarin.

Separately, the SEC’s lawsuit against Coinbase comes less than 24 hours after Binance’s lawsuit, but focuses on the exchange’s operations as a stock exchange, broker, and settlement agency. unregistered clearing, the agency alleges.

Both filings list several cryptocurrencies as securities, with 12 assets included in the Binance lawsuit and 13 in the Coinbase lawsuit, though the SEC said it “does not limit” those assets. that property.

Even in all this chaos, the crypto market hasn’t been much changed by the SEC lawsuits. For the first 24 hours after the two lawsuits, the crypto market was in the green.

But since then, the two largest cryptocurrencies by market capitalization, Bitcoin and Ether, down 2% and less than 1%, respectively, for the past seven days, CoinMarketCap data shows. Global Cryptocurrency Market Cap Drops 2.7% to 1.1 trillion USDin the same time frame.

I’ve spoken to countless sources, read too many court documents, and interviewed Coinbase’s chief legal officer, Paul Grewal, to understand the pandemic this week. Further details and insights can be found below in chronological order.

This week on web3

SEC sues Binance and CEO Zhao for allegedly mishandling funds, lying to regulators

The fees also include misleading investors into Binance’s systems to detect and control manipulative trading; Regulators say that the exchange has not taken the appropriate steps to restrict US-based investors from accessing its platform. The SEC also alleges that cryptocurrency BNB and stablecoin BUSD are securities. Binance stated in a post on Monday that it has been actively cooperating with the SEC investigations and has recently entered into discussions to reach “a negotiated settlement to resolve the disputes.” their investigation,” however, the SEC “abandoned that process and opted instead for unilateral action and litigation.”

Industry insiders say SEC lawsuit against Binance and CEO Zhao is a matter of ‘when, not if’ (TC+)

Several sources that TechCrunch+ spoke to on Monday shared a similar view that the allegations against Binance are not surprising. Chris Martin, head of research at Amberdata, said that Binance.US has been in “hot water” for a while. “Just looking at the CFTC lawsuit against them, that seems like a warning shot.” The SEC action comes months after the CFTC filed a lawsuit against Binance and Zhao for allegedly evading US regulations by offering unregistered futures and options contracts to US traders.

SEC declares BNB and BUSD as securities, including major tokens such as SOL, ADA and MATIC (TC+)

In the Binance lawsuit, the SEC alleged that the exchange’s BNB cryptocurrency and BUSD stablecoin are securities alongside 10 other cryptocurrencies: Solana’s SOL, Cardano’s ADA, Polygon’s MATIC, Filecoin’s FIL, Cosmos’ ATOM, Sandbox’s SAND, Decentraland’s MANA, Algorand’s ALGO, Axie Infinity’s AXS, and Coti’s COTI. What prompted the agency to highlight these cryptocurrencies and not the hundreds of other tradable assets on the exchange is unclear.

After Binance, US SEC sues Coinbase for violating securities laws (TC+)

The SEC has recently taken an increasingly active role in the burgeoning blockchain sector and previously served Coinbase with the Wells announcement in April. In contrast, Coinbase took a publicly defiant tone, arguing that the crypto market deserves a proper package of rules. However, the SEC disagreed, apparently deciding to apply the current securities laws to the US company.

SEC Chairman Gensler Criticizes Crypto Industry After Binance, Coinbase Fee Agencies (TC+)

If the sky is not clear, the water is already very hot in the crypto industry this week, thanks to the SEC. The industry is questioning why these lawsuits take so long to come to an end, why some crypto assets are labeled as securities and not others, and whether the actions of the crypto-assets are not. Whether or not the SEC’s actions affect fintech innovation domestically and globally — all of which SEC Chairman Gary Gensler attempted to address in a live interview with CNBC on Tuesday morning. “This is about both investors and issuers in the crypto space, to make them compliant.”

As the SEC files a petition to freeze Binance assets, the crypto market remains green

After the SEC filed 13 charges against Binance and its CEO Changpeng Zhao, as well as BAM Trading and BAM Management, they requested a temporary injunction to freeze assets for all involved, according to a statement. a file on Tuesday. The filing shows that the motion has been granted.

Coinbase Legal Director Expects New Crypto Laws to Come After SEC Lawsuits (TC+)

We sat down with Paul Grewal, Coinbase’s chief legal officer, to learn more about the company’s future operations, how the company intends to deal with the regulatory process, how confident the company is. in the context of repression and planning for best and worst scenarios. (The full interview was also shared in an additional Chain Reaction episode.)

newest group

This week we have a bonus episode! Jacquelyn interview Paul GrewalChief Legal Officer at Coinbase.

Grewal has been with Coinbase, the second largest cryptocurrency exchange globally, for almost three years. Previously, he was vice president and vice general counsel at Facebook, among other roles.

This week, Grewal has been busy testifying before Congress and dealing with recent legal issues facing Coinbase.

We dive into:

  • Potential Cryptocurrency Law from Congress
  • Sentiment of US agencies towards digital assets
  • The future of assets listed on exchanges
  • Binance’s SEC Case

For last week episode, Jacquelyn interviewed Gary Vaynerchuk, better known as Gary Vee. He is the chairman of VaynerX and the CEO of VaynerMedia and the NFT VeeFriends collection.

He is a five-time New York Times bestselling author and previously created Wine Library, one of the first e-commerce platforms for alcohol, in the early 2000s. In 2009, he co-founded VaynerMedia with his younger brother, AJ, and today the company serves clients such as PepsiCo, GE, Johnson & Johnson, Chase, and others.

Gary Vee is a “crazy” New York Jets fan (and wants to buy the team one day) and an investor in several big companies like Twitter, Venmo, and Facebook — which we’ll be looking at. mentioned in this volume.

We discussed some of the topics surrounding the NFT ecosystem, how Gary Vee entered the field and brought attention to his collection, and where he sees the field going. long-term development.

We also talked about:

  • VeeFriends Origin Story
  • The importance of intellectual property
  • official application
  • The Future of NFT
  • Tips for other projects

Register Chain reaction ABOVE Apple podcasts, Spotify or your favorite team platform to stay up to date on the latest episodes, and please leave us a review if you like what you hear!

Money tracking

  1. Aave’s Lens Protocol raised 15 million dollars to build a decentralized social network
  2. Taiko’s Laboratory raised $22 million over two rounds to build a decentralized ZK-Rollup, equivalent to Ethereum
  3. Haun Ventures led $10 million round for crypto game developer Argus . Laboratory
  4. Meanwhilea Bitcoin-focused life insurance provider, raises $19 million at a $100 million valuation
  5. Focus on Cosmos . Ecosystem Unofficial system increase 5.3 million dollars

This list is compiled with information from Messari as well as TechCrunch’s own report.

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