SEC vs Binance

[zasad@]

https://finance.yahoo.com/news/binances-us-arm-struggles-bank-140127369.html

"(Reuters) -The U.S. arm of cryptocurrency exchange Binance is struggling to find a bank to handle its customers' cash after the failure of Signature Bank last month, the Wall Street Journal reported on Saturday, citing people familiar with the matter.

Previously, the deposits were sent to either Signature Bank or Silvergate Capital Corp, both seen as crypto-friendly banks. However, after both failed, the exchange is rushing to find a new banking partner, according to the report.

Binance.US is using at least one intermediary to store funds, the report said, adding that since the money is being held by a third party, it can slow down sending and moving funds.

The company has unsuccessfully tried to establish relationships with Cross River Bank and Customers Bancorp Inc, the report said, adding that banks are reluctant due to concerns over regulatory risk."
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American banks now know who has a black mark from the CFTC.

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[zasad@]

Important events in this conflict

Washington D.C., June 5, 2023
https://www.sec.gov/news/press-release/2023-101
"SEC Files 13 Charges Against Binance Entities and Founder Changpeng Zhao
Charges 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."

Binance Answer
https://www.binance.com/en/blog/ecosystem/sec-complaint-aims-to-unilaterally-define-crypto-market-structure-8707489117122437402
SEC Complaint Aims to Unilaterally Define Crypto Market Structure

SEC motion to freeze assets of BAM Management US Holdings Inc. and BAM Trading Services Inc.
https://storage.courtlistener.com/recap/gov.uscourts.dcd.256060/gov.uscourts.dcd.256060.4.0.pdf

https://tokenist.com/sec-files-emergency-motion-to-freeze-binance-us-assets/
SEC Files Emergency Motion to Freeze Binance.US’ Assets

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https://support.binance.us/hc/en-us/articles/15133607064983-Binance-US-Will-Remove-Select-Trading-Pairs-Has-Paused-OTC-Trading
Binance.US Will Remove 10 Trading Pairs & Has Paused OTC Trading (Updated)

[safar1980]

"Binance lawyers allege SEC Chair Gensler offered to serve as advisor to crypto company in 2019
According to a new filing from Binance's lawyers, SEC Chair Gary Gensler offered to be an advisor to the crypto exchange in 2019.
At the time, Gensler was teaching at Massachusetts Institute of Technology's Sloan School of Management.
Gensler has been cracking down on the crypto industry over the past year, and earlier this week sued Binance.
SEC Chair Gary Gensler, who is in the midst of a hefty crackdown on crypto companies, offered to serve as an advisor to Binance’s parent company in 2019, according to the lawyers for Binance and founder Changpeng Zhao."
https://www.cnbc.com/2023/06/07/binance-lawyers-say-sec-chair-gensler-offered-to-be-advisor-in-2019.html

[pawel7777]

Binance lawyers allege SEC Chair Gensler offered to serve as advisor to crypto company in 2019

Lol. Gensler is such a weasel. It's almost fascinating how he is able to keep spouting all his nonsense with a straight face and conviction, like some sort of sociopath.
By the way, has it been confirmed that he personally knew the father of Caroline Ellison, the CEO of Alameda (sister company of FTX) or was it just rumours?

[zasad@]

https://www.coindesk.com/policy/2023/06/08/secs-gensler-rebuffs-crypto-complaints-says-gave-ample-warning-heat-was-coming/
"Gary Gensler, chair of the U.S. Securities and Exchange Commission, delivered a speech explaining his thinking after hammering Coinbase and Binance in back-to-back actions."
“Some promoters of crypto asset securities contend that their token has a function beyond simply being an investment vehicle,” Gensler said in remarks prepared for the Piper Sandler Global Exchange & FinTech Conference, delivered in the same week his agency brought major enforcement actions against Coinbase (COIN) and Binance, accusing respectively the U.S.’s and the world’s largest crypto exchanges of trading in unregistered securities.
“Some additional utility does not remove a crypto asset security from the definition of an investment contract,” Gensler said, though he added that tokens built for exclusive use in their blockchain ecosystems can be exempted from such accusations. “The investing public generally buys these crypto assets, at least in part, anticipating profit based on the efforts of those token issuers.”

[Zoomic]

Now I see SEC vs Binance, if I have answer on my question in SEC vs Coinbase thread, I will use it for this because they are related and same nature. The suit ought to be SEC VS Binance, Coinbase and Ors;

Binance lawyers allege SEC Chair Gensler offered to serve as advisor to crypto company in 2019

And if this allegation is trues, the whole issue can be something of witch hunt you know?.

[zasad@]

https://www.coindesk.com/policy/2023/06/14/binances-cyprus-unit-under-examination-for-deregistration-as-crypto-service-provider/
Binance Seeks to Withdraw Cyprus' Unit Crypto Service Registration
The world's largest crypto exchange won registration as a crypto asset service provider (CASP) in Cyprus in October last year.
"We are working hard to prepare our business to be fully compliant with MiCA when it is implemented in the next 18 months," a Binance spokesperson said in an email to CoinDesk.
___
Binance hopes that they will come to an agreement with the regulator in Europe and become one of the major crypto exchanges there, because they are being deprived of a lot of income in the United States.

[Porfirii]

https://www.coindesk.com/policy/2023/06/14/binances-cyprus-unit-under-examination-for-deregistration-as-crypto-service-provider/
Binance Seeks to Withdraw Cyprus' Unit Crypto Service Registration
The world's largest crypto exchange won registration as a crypto asset service provider (CASP) in Cyprus in October last year.
"We are working hard to prepare our business to be fully compliant with MiCA when it is implemented in the next 18 months," a Binance spokesperson said in an email to CoinDesk.
___
Binance hopes that they will come to an agreement with the regulator in Europe and become one of the major crypto exchanges there, because they are being deprived of a lot of income in the United States.

Although the news seems contradictory at first sight, since Cyprus is in Europe (and their legal currency is the EURO), what I eventually understand is that they are deregistering there so they can focus on fewer regulated entities in the eurozone. But they don't say where they'll be heading now.

Portugal is a well known crypto friendly jurisdiction here in Europe because capital gains on cryptos don't pose a taxable event in said country, but if I'm not wrong this is going to change anytime soon, so I'm curious about the future strategy of the exchange (not because I'm worried about their future, but out of mere curiosity on how these decisions are made).

[zasad@]

https://www.coindesk.com/policy/2023/06/14/binances-cyprus-unit-under-examination-for-deregistration-as-crypto-service-provider/
Binance Seeks to Withdraw Cyprus' Unit Crypto Service Registration
The world's largest crypto exchange won registration as a crypto asset service provider (CASP) in Cyprus in October last year.
"We are working hard to prepare our business to be fully compliant with MiCA when it is implemented in the next 18 months," a Binance spokesperson said in an email to CoinDesk.
___
Binance hopes that they will come to an agreement with the regulator in Europe and become one of the major crypto exchanges there, because they are being deprived of a lot of income in the United States.

Although the news seems contradictory at first sight, since Cyprus is in Europe (and their legal currency is the EURO), what I eventually understand is that they are deregistering there so they can focus on fewer regulated entities in the eurozone. But they don't say where they'll be heading now.

Portugal is a well known crypto friendly jurisdiction here in Europe because capital gains on cryptos don't pose a taxable event in said country, but if I'm not wrong this is going to change anytime soon, so I'm curious about the future strategy of the exchange (not because I'm worried about their future, but out of mere curiosity on how these decisions are made).

And why waste time on one country if the MICA law has already been signed and will work. In 18 months there will be a single law for all of Europe, and until that time, laws may differ in different European countries. In Portugal, everything is fine, but they will be required to work in 18 months under the new law.
But will Europe let CZ into its market?

[user210822]

Binance is about to start its' business at Republic of Georgia. They are hiring personnel. Name itself could outrage Gensler on top of the fact he himself explained on CNBC chanell as :m/2023/06/06/sec-chair-gensler-doubts-the-need-for-more-digital-currency.html] "We already have digital currency! Which is digital Dollar and digital Euro." Fight with Binance goes on... Winner takes it all? I'm about to move to Georgia (the Country, not the State) in a month from here. Would like to take active participation in the whole process  

[pawel7777]

But will Europe let CZ into its market?

That's a big question. The US has a pretty big influence on most European countries, but it's not like they have complete control over them. And probably subject of crypto trading is not of any major strategic importance, so maybe they won't be expanding their crypto crack-down outside of the US.
If I remember correctly, the most recent opinions of EU on crypto were not very friendly, and Binance had to block certain features for its UK customers (as well as well to stop supporting GBP deposits/withdrawals), so I'm not very optimistic here, but wish Binance all the best.

[zasad@]

Binance is about to start its' business at Republic of Georgia. They are hiring personnel. Name itself could outrage Gensler on top of the fact he himself explained on CNBC chanell as :m/2023/06/06/sec-chair-gensler-doubts-the-need-for-more-digital-currency.html] "We already have digital currency! Which is digital Dollar and digital Euro." Fight with Binance goes on... Winner takes it all? I'm about to move to Georgia (the Country, not the State) in a month from here. Would like to take active participation in the whole process  

Georgia is not a big country and there is a small population. This is a very small market for a large exchange, although Georgia has good crypto legislation.

But will Europe let CZ into its market?

That's a big question. The US has a pretty big influence on most European countries, but it's not like they have complete control over them. And probably subject of crypto trading is not of any major strategic importance, so maybe they won't be expanding their crypto crack-down outside of the US.
If I remember correctly, the most recent opinions of EU on crypto were not very friendly, and Binance had to block certain features for its UK customers (as well as well to stop supporting GBP deposits/withdrawals), so I'm not very optimistic here, but wish Binance all the best.

At the last conference I watched, bankers and businessmen were talking about blockchain-based digital assets that have value. This will provide more opportunities for development and earnings.

[Porfirii]

But will Europe let CZ into its market?

That's a big question. The US has a pretty big influence on most European countries, but it's not like they have complete control over them. And probably subject of crypto trading is not of any major strategic importance, so maybe they won't be expanding their crypto crack-down outside of the US.
If I remember correctly, the most recent opinions of EU on crypto were not very friendly, and Binance had to block certain features for its UK customers (as well as well to stop supporting GBP deposits/withdrawals), so I'm not very optimistic here, but wish Binance all the best.

At the last conference I watched, bankers and businessmen were talking about blockchain-based digital assets that have value. This will provide more opportunities for development and earnings.

I don't fully agree with you pawel7777: although as western economic powers it is logical that they are similar in many aspects, and North-American cultural influence over Europe is undeniable (but let's don't forget that vice versa also), there are many economic, social and political conflicting interests between them, and that's the reason why the UK left the EU (Brexited), because their interests fit better with the Commonwealth's than with the Union's.

So I think that you are mixing things up, and if Binance's way is eventually blocked in Europe I don't think it will be due to the influence of the US.

I'm very curious about the answer to zasad@'s question too, but we'll have to be patient until time tells and make decisions accordingly.

[zasad@]

But will Europe let CZ into its market?

That's a big question. The US has a pretty big influence on most European countries, but it's not like they have complete control over them. And probably subject of crypto trading is not of any major strategic importance, so maybe they won't be expanding their crypto crack-down outside of the US.
If I remember correctly, the most recent opinions of EU on crypto were not very friendly, and Binance had to block certain features for its UK customers (as well as well to stop supporting GBP deposits/withdrawals), so I'm not very optimistic here, but wish Binance all the best.

At the last conference I watched, bankers and businessmen were talking about blockchain-based digital assets that have value. This will provide more opportunities for development and earnings.

I don't fully agree with you pawel7777: although as western economic powers it is logical that they are similar in many aspects, and North-American cultural influence over Europe is undeniable (but let's don't forget that vice versa also), there are many economic, social and political conflicting interests between them, and that's the reason why the UK left the EU (Brexited), because their interests fit better with the Commonwealth's than with the Union's.

So I think that you are mixing things up, and if Binance's way is eventually blocked in Europe I don't think it will be due to the influence of the US.

I'm very curious about the answer to zasad@'s question too, but we'll have to be patient until time tells and make decisions accordingly.

https://fortune.com/crypto/2023/06/16/binance-europe-france-investigation-money-laundering-netherlands-vasp-license-withdrawal/
Binance loses footing in Europe as French prosecutors investigate exchange and Netherlands denies license application
"On Friday, French newspaper Le Monde reported that prosecutors were investigating the company’s branch in France for violating the country’s anti–money-laundering laws. The investigation concerns Binance’s allegedly illegal operations as a digital assets provider as well as “aggravated money laundering,” a spokesperson for the SEJF, the French governmental agency responsible for investigating financial crimes, told Fortune in a statement.
That same day, Binance announced that it was leaving the Netherlands after the Dutch regulatory agency did not approve the exchange’s application to become a VASP, or virtual asset services provider."

The response from European regulators has been swift and such allegations will prevent the exchange from operating in Europe.

[Porfirii]

But will Europe let CZ into its market?

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https://fortune.com/crypto/2023/06/16/binance-europe-france-investigation-money-laundering-netherlands-vasp-license-withdrawal/
Binance loses footing in Europe as French prosecutors investigate exchange and Netherlands denies license application
"On Friday, French newspaper Le Monde reported that prosecutors were investigating the company’s branch in France for violating the country’s anti–money-laundering laws. The investigation concerns Binance’s allegedly illegal operations as a digital assets provider as well as “aggravated money laundering,” a spokesperson for the SEJF, the French governmental agency responsible for investigating financial crimes, told Fortune in a statement.
That same day, Binance announced that it was leaving the Netherlands after the Dutch regulatory agency did not approve the exchange’s application to become a VASP, or virtual asset services provider."

The response from European regulators has been swift and such allegations will prevent the exchange from operating in Europe.

News is not readable (it is paid) but I suppose that the headline is enough to understand what has happened. In Spain, Binance recently registered and got whitelisted by the Banco de España, but if they are starting to have problems in France (and the Netherlands) now, it does not bode well for when a single regulation for Europe is implemented.

Still a long way to go, and things can change in the meantime, so uncertainty is high, but yes, a change in trend is intuited.

[zasad@]

But will Europe let CZ into its market?

<...>

<...>

<...>

https://fortune.com/crypto/2023/06/16/binance-europe-france-investigation-money-laundering-netherlands-vasp-license-withdrawal/
Binance loses footing in Europe as French prosecutors investigate exchange and Netherlands denies license application
"On Friday, French newspaper Le Monde reported that prosecutors were investigating the company’s branch in France for violating the country’s anti–money-laundering laws. The investigation concerns Binance’s allegedly illegal operations as a digital assets provider as well as “aggravated money laundering,” a spokesperson for the SEJF, the French governmental agency responsible for investigating financial crimes, told Fortune in a statement.
That same day, Binance announced that it was leaving the Netherlands after the Dutch regulatory agency did not approve the exchange’s application to become a VASP, or virtual asset services provider."

The response from European regulators has been swift and such allegations will prevent the exchange from operating in Europe.

News is not readable (it is paid) but I suppose that the headline is enough to understand what has happened. In Spain, Binance recently registered and got whitelisted by the Banco de España, but if they are starting to have problems in France (and the Netherlands) now, it does not bode well for when a single regulation for Europe is implemented.

Still a long way to go, and things can change in the meantime, so uncertainty is high, but yes, a change in trend is intuited.

This is the original in French
https://www.lemonde.fr/pixels/article/2023/06/16/binance-principale-plate-forme-mondiale-d-echange-de-cryptomonnaies-visee-par-une-enquete-en-france_6177876_4408996.html

Of course, if large countries in Europe begin to block Binance, then other countries will suspend the existing licenses of the exchange. Although the Binance exchange has a lot of money, they will not be able to fight with all the regulators in the US and Europe.

[pawel7777]

I don't fully agree with you pawel7777: although as western economic powers it is logical that they are similar in many aspects, and North-American cultural influence over Europe is undeniable (but let's don't forget that vice versa also), there are many economic, social and political conflicting interests between them, and that's the reason why the UK left the EU (Brexited), because their interests fit better with the Commonwealth's than with the Union's.

So I think that you are mixing things up, and if Binance's way is eventually blocked in Europe I don't think it will be due to the influence of the US.

Of course, different countries have different interests, but strong countries always have some power to impose their will onto weaker ones. The Russian-Ukraine war is a good example, it was obvious that Germany and France initially were pushing for peace talks and were hoping for things to return back to normal, but that wasn't in line with US's goals. To make their arguments more convincing, US blew up Nordstream 2 baltic pipe, sending a message to Germany that going back to old ways of buying gas from Russia is no longer an option.
I'm not saying that Europe is totally controlled by the US, but it's undeniable that the US has been pretty effective in forcing their way in the most important issues.

So the question is what's the real reason behind the crypto crackdown. i.e. if they decided that crypto is a major threat to their financial system, then they won't allow the crypto industry to just move and bloom in other countries. Plus, even without US pressure, other countries could come to the same conclusion and start seeing crypto as a threat.

[zasad@]

I don't fully agree with you pawel7777: although as western economic powers it is logical that they are similar in many aspects, and North-American cultural influence over Europe is undeniable (but let's don't forget that vice versa also), there are many economic, social and political conflicting interests between them, and that's the reason why the UK left the EU (Brexited), because their interests fit better with the Commonwealth's than with the Union's.

So I think that you are mixing things up, and if Binance's way is eventually blocked in Europe I don't think it will be due to the influence of the US.

Of course, different countries have different interests, but strong countries always have some power to impose their will onto weaker ones. The Russian-Ukraine war is a good example, it was obvious that Germany and France initially were pushing for peace talks and were hoping for things to return back to normal, but that wasn't in line with US's goals. To make their arguments more convincing, US blew up Nordstream 2 baltic pipe, sending a message to Germany that going back to old ways of buying gas from Russia is no longer an option.
I'm not saying that Europe is totally controlled by the US, but it's undeniable that the US has been pretty effective in forcing their way in the most important issues.

So the question is what's the real reason behind the crypto crackdown. i.e. if they decided that crypto is a major threat to their financial system, then they won't allow the crypto industry to just move and bloom in other countries. Plus, even without US pressure, other countries could come to the same conclusion and start seeing crypto as a threat.

If Germany and France refuse the shower raw materials that they bought in Russia. If Germany refuses nuclear energy, then this indicates an imminent economic crisis in these countries.
___

Binance, SEC strike deal to keep US customer assets in country
https://www.reuters.com/technology/urgent-binance-sec-strike-deal-move-all-us-customer-funds-wallet-keys-back-2023-06-17/

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Any deal or agreement is already at least a small chance for cooperation and the start of negotiations. Until criminal cases are opened, the parties to the conflict can find a compromise.

[pawel7777]

Binance, SEC strike deal to keep US customer assets in country
https://www.reuters.com/technology/urgent-binance-sec-strike-deal-move-all-us-customer-funds-wallet-keys-back-2023-06-17/

That's some positive news indeed, as otherwise Binance US operations would get completely destroyed. But not sure if we should read this as SEC softening their stance and looking for compromise, as Binance, in their tweet, referred to it as a "Court-ordered agreement". So it could be that the court forced SEC into accepting that agreement, rather then it resulting from SEC's good will.

Here's what Binance themselves had to say about that:

https://twitter.com/BinanceUS/status/1670077275419869186

We want to provide an update on the current battle http://Binance.US finds itself in with the SEC. We are pleased to inform you that the Court did not grant the SEC’s request for a TRO and freeze of assets on our platform which was clearly unjustified by both the facts and the law.

Instead, we were able to reach a Court-ordered agreement with the SEC that allows us to continue our ordinary course business. There has never been any evidence presented by the SEC concerning mis-use of customer assets. In fact, the SEC lawyers conceded in Court earlier this week, when asked by the Judge, that they had no evidence suggesting that any such thing had occurred.

The SEC’s request would have effectively shuttered our business, which is consistent with the agency’s continued attempts to kill the crypto industry by any means, even by making allegations that are not supported by the facts.

This fight has damaged our business and our reputation but not our fighting spirit or our resolve to defend ourselves against unwarranted charges and “regulation by enforcement” tactics that do not belong in our system of justice.

We look forward to continuing to defend ourselves in court.

[Zoomic]

Instead, we were able to reach a Court-ordered agreement with the SEC that allows us to continue our ordinary course business.

What does this statement really mean?
What is ordinary course business in this context.
Doesn't it mean normal trading and other things but not related to staking and other activities why SEC classified them as securities?