The United States Securities and Exchange Commission (SEC) has extended the number of cryptocurrencies that will be added in its new lawsuit with the biggest crypto exchange, Binance. SEC Binance lawsuit is a new development that took the whole crypto industry by surprise owing to the circumstances that led to it. Since the year began, Binance legal issues have been piling up, and the lawsuit from the SEC is the most recent.
This number of cryptocurrencies will be under the list of unregistered securities to cover US$115 billion worth of tokens included in the lawsuit. According to the SEC Binance lawsuit, several cryptocurrencies traded in the crypto exchange are unregistered securities. Cryptocurrencies listed in their legal suit included the BNB token issued by Binance, stablecoin BUSD, Solana, Cardano’s ADA, and Polygon’s MATIC.
The Binance Lawsuit
The Securities and Exchange Commission served Binance the legal papers on Monday when they accused the crypto exchange of violating the law by trading and offering unregistered securities in their exchange. The federal government commission filed 13 charges against Binance on Monday.
The first and most prominent charge against Binance was that the crypto exchanges enriched themselves by trading unregistered securities to the detriment of US regulations and the SEC alleged that Binance and its CEO had made billions of dollars from trading these illegal securities.
"This case arises from Defendants’ blatant disregard of the federal securities laws and the investor and market protections these laws provide. In so doing, Defendants have enriched themselves by billions of U.S. dollars while placing investors’ assets at significant risk," SEC said in the lawsuit.
The Securities and Exchange Commission also claimed that the platforms owned by Binance are illegal and have been utilized to manipulate and squander the funds of US citizens.
"Defendants have unlawfully solicited U.S. investors to buy, sell, and trade crypto asset securities through unregistered trading platforms available online at Binance.com (“Binance.com Platform”) and Binance.US (“Binance.US Platform”) (collectively, “Binance Platforms”). Defendants have engaged in multiple unregistered offers and sales of crypto asset securities and other investment schemes. And Defendants BAM Trading and BAM Management defrauded equity, retail, and institutional investors about purported surveillance and controls over manipulative trading on the Binance.US Platform, which were in fact virtually non-existent," the case filing said.
Reactions to the New Development
The commission's chairman handling the lawsuit against Binance said on Twitter that Binance has been engaging in a web of deception and manipulation of their crypto exchange to defraud users. Gary Gensler, the 33rd chairman of the SEC, told users to desert the crypto exchange due to their illegal dealings.
"Through thirteen charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law," he said on his Twitter page.
Through thirteen charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law. https://t.co/E06hVOaYby
— Gary Gensler (@GaryGensler) June 5, 2023
Binance's spokesperson has rejected the lawsuit from the SEC, saying that the federal commission got it all wrong. According to this spokesperson, the services which the crypto exchange offer isn't even securities in the first place.
"Rather, BNB is a native token, designed to create an internal economy; thus, its value derives from its participants," the spokesperson said.