by Samuel Mbaki | Jun 14, 2023 | Follow up, Regulation
Key Points
- A U.S. Court has asked Binance.US and the Securities and Exchanges Commission to negotiate and prevent a total asset freeze.
- United States District Judge Amy Berman Jackson threw away the request from SEC to freeze Binance.US assets, saying it was unnecessary.
U.S. Judge asks Binance.US and SEC to reach a pact
Binance.US wins in court as U.S. District Judge Amy Berman Jackson orders SEC to negotiate and not freeze the exchange’s assets. Judge Berman has asked the two entities to reach a compromise claiming that extreme measures like the freezing of Binance.US assets are not necessary.
The SEC filed a complaint against the exchange on June 5, alleging that the exchange was acting as an unregulated securities broker in the U.S. It stated that the exchange had been exposing American citizens to unregistered and unregulated securities that could harm them in their process of investing.
The SEC quoted several instances where the exchange executives had incriminated themselves, accepting that they are an unregulated securities exchange. The regulator also flagged several bank transfers between Binance.US and the international exchange branch, saying their accounting is tied.
As such, the SEC expressed that Binance could take away funds from the U.S. platform; thus, they should be frozen to avoid funds flight. However, Judge Berman Jackson now sees no need for ‘extreme’ measures like that to be taken.
“Shutting it down completely would create significant consequences not only for the company but for the digital asset markets in general,” Jackson said at a June 13 hearing.
Judge Berman Jackson added that she wouldn’t decide on SEC’s motion for the temporary restraining order against Binance.US until the two parties had worked through their issues.
An update for the two parties’ negotiations has been scheduled for a hearing on June 15. Keep watching Fintech Express for updates on crypto regulation and other fintech-related developments.
by Samuel Mbaki | Jun 13, 2023 | Follow up, Regulation
Key Points
- U.S. lawmakers have filed a motion to restructure SEC and reduce the power bestowed on the chairman position.
- Senator Warren Davidson wants the SEC restructured to do away with the chair position as it could be involved in market manipulation.
- Senator Davidson also wants current SEC Chair Gary Gensler fired.
U.S. lawmakers have filed a bill to restructure SEC
With market manipulation possibility in mind, U.S. lawmakers have filed a bill to allow the restructuring of the SEC to do away with the chairman position. Senator Warren Davidson and Rep. Tom Emmer were responsible for introducing the “SEC Stabilization Act” into the House of Representatives, according to his June 12 announcement.
The bill aims to fire the currency Securities and Exchange Commission (SEC) Chair Gary Gensler and do away with that position forever. The bill is backed by community cries that SEC chairpersons could be involved in market manipulation by forcing special asset classes like crypto to bend to their will without first introducing binding laws.
In a statement, Davidson said:
“U.S. capital markets must be protected from a tyrannical Chairman, including the current one. That’s why I’m introducing legislation to fix the ongoing abuse of power and ensure protection that is in the best interest of the market for years to come. It’s time for real reform and to fire Gary Gensler as Chair of the SEC.”
Davidson had been working on the bill since January this year following observations that SEC chair Gary Gensler had been showcasing too much power over markets. The bill will redistribute power between the Chair and commissioners whilst removing Gary Gensler from office. It will also add a sixth commissioner to the agency, allowing any party to hold a majority on the commission and also introduce an executive director position.
SEC chairman criticized for indirect market manipulation
The crypto market has been having bad faith with SEC chairman Gary Gensler and accuses him of market manipulation. They have been noticing that he introduces new lawsuits in questionable intervals as they coincide with green zones, which results in the market’s collapse.
Gary Gensler was also caught saying that the U.S. doesn’t need any more new crypto assets, which sent shock waves across the crypto markets. SEC also mentioned around 67 crypto assets in all their crypto lawsuits claiming they are securities. As a result, some of these assets have lost value by as much as 19%, a move that has been heavily criticized and branded as possible market manipulation.
Rep Tom Emmer, the co-author of the bill, claimed that the SEC Stabilization Act is necessary as investors will be shielded from reckless leadership.
“The SEC Stabilization Act will make common-sense changes to ensure that the SEC’s priorities are with the investors they are charged to protect and not the whims of its reckless Chair.”
Though Davidson and Emmer never mentioned crypto assets in their statements or bill, they are pro-crypto and known to be critical of Gensler’s officiating. Emmer, for instance, had called Gary Gensler a “bad faith regulator” before while Senator Davidson campaigned for crypto and served as the vice chair of the House Financial Services Committee’s new Subcommittee on Digital Assets, Financial Technology, and Inclusion.
Following the SEC’s recent actions companies like Robinhood, Coinbase, and Bittrex have been forced to rethink their U.S. market strategy. Others like Animoca Brands have also left the U.S. with many more expected to follow as they are avoiding colliding with the regulator over trading assets that the regulator sees as securities.
The new bill comes at an opportune time when the crypto community is on the verge of hitting back at the SEC for unfavorable regulation. However, only time will tell how the courts will rule and the ruling’s influence on the industry’s future.
Keep watching Fintech Express for updates on regulations and other fintech-related developments.
by Fintech Express | Jun 8, 2023 | Regulation, Follow up
Key Points
- Controversy has sparked again regarding SEC’s Gary Gnsler’s motivations behind charging Binance.US as lawyers allege he has a conflict of interest.
- Gary Gensler allegedly was rejected as Binance advisor in 2019, and his recent act of charging the exchange could be motivated by revenge.
- The crypto community continues hitting back at Gary Gensler’s ‘pretentious’ claim to care for investors.
Gary Gensler was rejected as Binance Advisor; Binance lawyers
Per Binance lawyers, Gary Gensler had applied to be an advisor for the exchange in 2019 but was rejected. They allege that the decision by the company to go with another person could have hurt Gensler and motivated him to go after the exchange after he was given power as the Chair of SEC.
Binance Lawyers say that Gensler is having a conflict of interest with the ongoing case as he seems to be motivated more by extorting money from the exchange rather than regulating the crypto industry fairly. They cited that the exchange is always ready to work with regulators and identify any issues that could arise from their services, a step that SEC walked all over before heading to court seeking to settle charges with the exchange.
More controversy over Gary Gensler’s motivations
Binance explains that it’s ready to comply with set regulations, and the regulators are also obligated to make the field level for all participants to foster growth and innovation and not chase it away to offshore nations. Now, SEC is seeking U.S. courts to freeze Binance.US assets, claiming that there are many parallels between Binance and the collapse of the crypto exchange FTX.
However, it has not gone unnoticed that SEC did nothing to prevent the collapse of FTX, like looking into how the exchange operates while it had been committing financial fraud under its nose for years. More controversy comes as Binance lawyers revealed that Gary Gensler was not fit to join SEC as he lied under oath during his testimony in July 2019 for Facebook’s proposed cryptocurrency and wallet.
They said that Gary stated the following words under oath.
“I do not advise any financial, technology, blockchain or other companies, nor do I own any cryptocurrencies.”
Days ago, Gensler said that the U.S. does not need more digital currencies as they are meant to be non-compliant.
“We don’t need more digital currency,” claiming that the crypto business model is “built on non-compliance.”
These comments from Gary Genslers show his interest in smothering cryptocurrencies rather than fostering their regulation and adoption. As such, the crypto community has raised their voices against him, with lawmakers telling him to prepare to appear ahead of Congress to explain why he thinks he has the power to decide for Americans.
Others have called for the crypto industry to pull their efforts together and fight the supposed “Operation Chokepoint 2.0,” which is meant to smother crypto in favour of a more state-controlled CBDC.
Keep watching Fintech Express for updates on SEC’s crypto regulation efforts and other Fintech-related developments.
