June 9, 2023
By Sharan Kaur Phillora
The U.S. Securities and Exchange Commission (SEC) has recently targeted two of the most prominent cryptocurrency exchanges, Binance and Coinbase, with legal action.
Here’s what we know:
On June 5, Binance found itself in the SEC’s crosshairs, accused of dealing in unregistered securities. The day following, the SEC filed similar charges against Coinbase. According to the commission, certain cryptocurrencies offered by Coinbase, including Solana (SOL), Polygon (MATIC), and The Sandbox (SAND), should be categorized as securities.
Binance is accused of moving their clients’ crypto and fiat funds as they saw fit. This claim harks back to accusations levelled at FTX, another major crypto exchange that has since fallen into disrepute. It should be noted, however, that while Sam Bankman-Fried, the founder of FTX, is currently facing 13 criminal charges, neither Binance nor its CEO has been hit with any criminal charges to date.
Meanwhile, the SEC accuses Coinbase of functioning as an unregistered national securities exchange, broker, and clearing agency for several years. The San Francisco-based company is also accused of offering and selling unregistered securities through its staking service.
The SEC’s complaint against Coinbase does involve an accusation of commingling, but it’s about the merging of functions, not funds. According to the commission, the separate roles of a securities exchange, broker, and clearing agency have been conflated by Coinbase.
Finally, Binance and its CEO are alleged to have secretly allowed large U.S. clients to trade on their main platform, despite public claims to the contrary. According to the SEC, this represents a covert attempt to evade U.S. securities laws.
Experts believe that the latest SEC lawsuits against the two industries has had the impact of uniting the denizens of the crypto industry.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.