The Securities and Exchange Commission (SEC) is ramping up its legal case against Binance, one of the world's largest cryptocurrency exchanges. The SEC's intensified focus on Binance follows a series of high-profile executive departures from the company, including the U.S. CEO, Brian Shroder, and other key personnel.
The wave of resignations has raised concerns about employee turnover within Binance. More than a dozen employees have left their roles at the company in recent weeks, including top executives such as former chief strategy officer Patrick Hillmann and key legal officers. These departures are significant given their potential knowledge regarding asset custody and control.
Alongside these internal shifts, Binance.US has experienced a significant drop in trading volume. Data from Kaiko reveals that weekly trading volume fell from a peak of $5 billion in March 2023 to around $40 million at the time of reporting on Tuesday.
The SEC is urging for a deeper investigation into Binance's activities, including asset custody. This move follows Binance's previous opposition to the regulator's motion to compel. The company had argued that the SEC should consider its provided counsel narratives, meticulously prepared declarations, and a select collection of documents concerning control over customers' assets. Binance claimed that any remaining concerns were essentially baseless and trivial.
However, the SEC's response suggests that Binance's opposition has only highlighted the complexities that the regulator has been grappling with for months. The SEC has reiterated its push for depositions in light of recent resignations within Binance.
Binance has been under increased scrutiny from the SEC since June 2023 when it was sued for alleged rule violations that included securities fraud, money laundering, and commingling customer assets. The company and its founder, known as CZ, have denied these allegations and vowed to defend their position in court.
As the SEC continues to intensify its case against Binance, the future of the cryptocurrency giant hangs in the balance. The outcome of this litigation could have far-reaching impacts on the broader crypto industry.
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