SEC Lawsuit Against Binance Could be a Misstep, Experts Say

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SEC Lawsuit Against Binance Could be a Misstep, Experts Say

If crypto is the design of the next financial system, this [lawsuit] is a huge mistake, said Jim Bianco, president and founder of Bianco Research, in response to the Securities and Exchange Commission’s (SEC) lawsuit against Binance, the world’s largest crypto exchange. The SEC’s action against Binance is another attempt by U.S. lawmakers to drive crypto out of the [country], Bianco added.

The SEC’s lawsuit alleges that Binance has been offering unregistered securities and staking services to the general public, violating U.S. securities laws. This follows the Commission’s suit against Justin Sun and three of his companies earlier this year for the unregistered offer and sale of crypto asset securities.

Aaron Kaplan, co-CEO and co-founder of Prometheum Inc, believes that the SEC’s action signals the beginning of a shift in the U.S. towards regulated market infrastructure for crypto, which should ultimately benefit U.S. investors and allow innovation to thrive.

Binance confirmed that the exchange had received a Wells Notice, a warning from the SEC, earlier this year that ultimately led to a suit. Coinbase also received a warning in March that it may face an enforcement action due to its listing of potential unregistered securities.

While some experts welcomed the SEC’s suit, others expressed concern that the lack of regulatory clarity is causing digital asset ventures to leave the United States for friendlier jurisdictions, potentially depriving the U.S. of jobs and innovation at home.