Binance US Lawyers Up, Braces for Looming Federal Charges

The world’s biggest cryptocurrency company has hired a high-powered legal team to battle the U.S. Securities and Exchange Commission—including contracting an ex-SEC lawyer. 

According to a document filed today, Binance US, which the SEC targeted last week with 13 civil charges, has hired George Canellos, who served as co-director of the SEC’s Division of Enforcement. 

In its lawsuit last week, the SEC claimed that the mega exchange Binance, its boss Changpeng ‘CZ’ Zhao, and Binance US broke securities laws and “enriched themselves by billions of U.S. dollars while placing investors’ assets at significant risk.”

Binance US is a separate company for American citizens that uses the Binance logo but is run independently. The SEC last week alleged that “Zhao and Binance secretly controlled the Binance US platform’s operations behind the scenes.”

Binance US Market Shrinks 78% in Just 7 Days After SEC Lawsuit

Following Binance and sister company Binance US’s troubles with American regulators, investors are pulling out.  Data from crypto data firm Kaiko shows that market depth on the US sister exchange has plunged by nearly 80% since the U.S. Securities and Exchange Commission’s lawsuit last week.   The SEC last Monday named both Binance and its US-based sister company in a lawsuit alleging that Binance boss Changpeng Zhao commingled customer funds through a “web of deceit.”  “In the past week market...

Canellos is currently the global head of the litigation and arbitration group at Milban in New York City. He previously worked for the SEC for four and a half years and oversaw major cases—including that of Raj Rajaratnam, one of the biggest insider trading cases in U.S. history. 

John Reed Stark, former head of SEC’s Office of Internet Enforcement, described Canellos on Twitter by writing: “Think Liam Neeson meets Perry Mason.”

The other attorneys on the case include former federal prosecutor Adam Fee and bankruptcy expert Andrew M. Leblanc.

SEC Chair Gary Gensler: The US Doesn't Need Cryptocurrency

Shortly after the U.S. Securities and Exchange Commission filed its lawsuit against Coinbase on Tuesday, SEC Chairman Gary Gensler said that the crypto industry’s entire business model is “built on non-compliance.” In a damning CNBC interview, top American securities regulator said: “We don’t need more digital currency.”  He then said that crypto exchanges are “commingling a number of functions” which wouldn’t be acceptable in traditional finance, giving the hypothetical example of the New York...

Binance is facing serious charges: The SEC has alleged that the company and its owner moved around customers’ fiat and crypto “as defendants pleased.” 

So serious, in fact, that the SEC last week asked a judge to freeze assets held by Binance US. 

The 13 charges against Binance also include operating unregistered exchanges, broker-dealers, and clearing agencies; misrepresenting trading controls and oversight on the Binance.US platform; and the unregistered offer and sale of securities.

The move by Wall Street’s top regulator was the latest in its crackdown on the crypto industry. Since the collapse of mega digital asset exchange FTX last year, the SEC has gone after a number of major American crypto brands—including Coinbase and Kraken.