The US securities regulator’s lawsuits against cryptocurrency exchanges Binance and Coinbase this week mark a more aggressive legal assault on the cryptocurrency industry, a lean the agency has failed to demonstrate in the past, especially against the collapsing FTX.
This topic is widely discussed by the community that revolves around cryptocurrencies. Everyone has their attention on the accusations that the Securities and Exchange Commission (SEC) is making against two of the companies largest in the industry.
Binance and Coinbase were charged with “violating” US securities laws. Both cases jump to the scene as the agency’s highest-profile enforcement actions on the industry of crypto assets. Although it also leaves doubts since it points to two companies, but why was there no lawsuit against FTX? the community wonders.
“Gensler suggests there are parallels between Binance and FTX, but the latter exchange mysteriously escaped a lawsuit,” points community member Keyur Rohit.
His point of view is quite logical, especially if one takes into account that the bankruptcy of FTX arrived target the SEC, as CriptoNoticias reported last year.
At the time, Congressman Tom Emmer urged Gary Gensler to testify before Congress and answer about the cost of “his regulatory failures” surrounding the bankrupt exchange.
Similarly, thousands of people in the United States asked to know about the alleged relationship between Gensler and FTX, which until now counts as one of the biggest frauds in the country’s history.
Gensler suggests there are parallels between Binance and FTX
As for the parallels between Binance and FTX that Keyur Rohit highlights, there is the point that, in their respective lawsuits, the SEC and the Commodity Futures Trading Commission (CFTC) violate federal securities laws.
In its lawsuit against Binance, the SEC files 13 charges, including accuses the exchange of illegally handling client funds. According to the indictment, part of the Binance funds flowed through a non-transparent corporate network to purchase a yacht worth US$11 million.
In 2021, “at least $145 million was transferred from BAM Trading to a Sigma Chain account.” Supposedly, another $45 million also flowed between these companies who subsequently “used $11 million to buy a yacht,” according to the SEC.
The community highlights this supposed discovery that the agency has made, because it was not able to do this type of follow-up on FTX. In fact, Ripple CEO Brad Garlinghouse suspicion that recent lawsuits against the cryptocurrency industry are just a smoke screen to divert attention from his alleged “debacle with the FTX case”.
Other community members mention the considerable donations that FTX made to the benefit of political parties, something that they believe may have contributed to the fact that lawsuits were not executed against this exchange.
Behind FTX, declared bankrupt, a complex social fabric had been woven that involved politicians and regulators. This would have allowed his team operate irregularly without raising red flags that something was wrong, as revealed in an investigation by CriptoNoticias.
Why was there no SEC lawsuit against FTX?
While it is true that the SEC accused Sam Bankman Fried, former CEO of FTX, of creating a scheme to defraud investors in that company, in reality there was never a lawsuit about the wrongdoing with which this cryptocurrency exchange was operating.
And it will probably never be known for sure why the SEC didn’t sue on time or raise the alarm about wrongdoing. This exchange even violated its own regulation by using user money to place risky bets.
Bankman Fried’s attorneys are currently fighting a criminal case filed last December by the Department of Justice, which includes wire fraud charges, conspiracy to commit money laundering and conspiracy to violate campaign finance laws.
However, because the subsequent charges were not part of the original deal to extradite the former FTX boss, his legal team says they should be thrown out. Most strikingly, the US government seems to agree that the later charges can be dropped.
“The government will proceed with the new charges. . . if Bahamas conscious at trial on these charges. It will not proceed with those charges if the Bahamas denies the government’s request, ”says the court file. seen by financial times.
From the way the SEC handled the FTX case, technology consultant Edward Snowden warned that “regulators were quietly playing with the thieves who stole money from 5 million people.” Meanwhile, the community points: “Let us demand transparency and accountability from the SEC”.