In 2021, the party was raging: crypto asset prices had skyrocketed, stories of overnight millionaires plastered the pages of newspapers, and companies like and FTX were splashing out millions of dollars on naming rights to sports stadiums and Super Bowl ads in hopes of convincing even more people to come join the mania. It’s tough to be the buzzkill who comes in and shuts down a party when everyone’s having a good time, and the SEC seemed to know it. These are hardly the first lawsuits that the agency has used to take aim at the industry - but they’re a marked shift. Unlike in the Coinbase suit, the Binance case also includes complaints aimed directly at the company’s CEO, Changpeng “CZ” Chao. Binance is additionally charged with engaging in unregistered securities offerings by issuing BNB, a token that the SEC alleges functions like a share in the Binance company, and BUSD, a stablecoin pegged to the US dollar. After years of regulatory turf wars over an industry widely seen as the Wild West, the SEC has planted its flag in the cryptocurrency industry as firmly as ever, hoping that courts will support the agency’s opinion that the vast majority of crypto assets qualify as a type of carefully regulated financial instrument known as securities, and agree that the unregistered crypto platforms that have set up shop in the United States are flagrantly violating the laws that regulate them.īoth cases allege that the companies were illegally operating without registering with the SEC, and offered unregistered securities in the form of crypto staking: programs in which customers lock up their crypto tokens in exchange for rewards. A second lawsuit came the very next day against Coinbase, the largest exchange based in the United States. The Securities and Exchange Commission filed suit on Monday against global giant Binance, the largest cryptocurrency exchange in the world.
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