The Binance.US exchange has hired a former Securities and Exchange Commission (SEC) official as part of its legal team to defend itself against accusations of operating as an unregistered exchange.
According to a June 12 news from Bloomberg, Binance.US has hired former SEC Co-Head of Control George Canellos with the international law firm Milbank LLP along with three other attorneys. Canellos left the SEC in 2014 after serving for more than 4 years in various leadership positions.
“Binance is clearly preparing for criminal prosecution and continues to hire the best defense attorneys in the world,” said former SEC Internet watchdog chief John Reed Stark on Twitter. “Given the seriousness of the fraud alleged by the CFTC and the SEC (which could also be the tip of the iceberg of any criminal prosecution), a Justice Department prosecutor would undoubtedly seek prison terms for anyone convicted or who pleads guilty to crimes related to Binance”.
Canellos’ addition to Binance.US’s legal team came at a time when the US company was facing a lawsuit from the SEC alleging that it had failed to register as an exchange, broker, and clearing agency. The SEC made similar allegations against global exchange Binance in the same filing and against Coinbase in a later filing, and attempted to freeze Binance.US assets through a temporary restraining order.
“If the Court addresses the merits of the SEC’s motion, it should deny that motion,” said Binance.US in a June 12 filing regarding the SEC’s injunction to freeze assets. “The solutions proposed by the SEC would effectively kill the business [de Binance.US]. The SEC seeks, among many other things, a draconian and unduly onerous freeze on all company operations without exception.”
Following the SEC actions, Binance.US announced on June 9 that it would suspend US dollar deposits and possibly fiat withdrawals starting June 13. The exchange cited the SEC’s “extremely aggressive and intimidation tactics” among the reasons for the move.
US lawmakers and industry leaders have criticized the SEC for its seemingly heavy-handed approach to crypto asset enforcement. On June 12, Representative Warren Davidson called for the firing of SEC Chairman Gary Gensler through a bill intended to restructure the commission.
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