Binance's Growing Legal Troubles: Are They Facing a Crisis?

[Zlantann]

I think legal challenges often serve as a litmus test for any organization, and Binance is currently under the magnifying glass. The SEC has come down hard on Binance, bringing forth 13 charges related to securities violations. These charges revolve around allegations of wash trading and the illegal sale of BNB and BUSD tokens as unregistered securities.

This case will be an interesting legal battle. I am more confident that the courts in the US will deliver a fair judgment. The matter is a regulatory issue and Binance is arguing that the SEC failed to establish clear laws for the sector. Most of the charges against Binance might be dropped because they don't fall within the regulatory jurisdiction of the SEC.   

Even before the SEC lawsuit, two key figures at Binance, CZ  and former Chief Compliance Officer Samuel Lin, were charged by the CFTC for their questionable actions. The CFTC has not only issued charges but seeks to impose a payment trading and registration ban on the exchange, which would effectively mean Binance could no longer do business in the U.S. These legal battles are no trifles, and the implications are profound.

The SEC and Commodity Futures Trading Commission (CFTC) have not fully understood their roles as the regulators of the cryptocurrency ecosystem. So we will keep on having these litigation issues until both commissions develop a comprehensive framework that guides the US cryptospace. 

The situation at Binance reminds us of a familiar tale: FTX. Is Binance headed down the same path? One thing that can't be ignored is the timing of key personnel departures from Binance. What's even more intriguing is the timing of key personnel departures from Binance. Several high-profile executives, including  its Chief Strategy Officer, President of Compliance, and General Counsel left Binance in what appeared to be a coordinated move. While the official statement cites personal reasons for their departures, rumors suggest that these executives were not satisfied with CZ's handling of the DOJ  investigation. The timing is indeed peculiar and bears a striking resemblance to the situation that unfolded before FTX's collapse when Sam Trabucco left Almeda Research.

In the crypto world, things move fast. I think Binance is facing its biggest threat and I for one am terrified of what's to come, but they can never go down like ftx. Can Binance regain trust?

These litigation issues and managerial drama should serve as a warning to people who keep their funds in centralised exchanges. The government can come up with any drastic decision that can make them lose their funds. The resignation of these top officials of Binance shouldn't be taken for granted because they left because of some important reasons. Binance’s Head of Asia Pacific Market, Leon Foong has also resigned and the reason for his departure was also kept secret.

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[philipma1957]

While concerning, I don't think Binance is on a hot bed right now, especially when you consider the fact that BNB isn't even a security. SEC is pretty much throwing whatever they can to undermine the cryptocurrency scene in the US in favor of their CBDC, which is arguably inferior and less enticing than the superior cryptocurrency system that we have built for over a decade. Binance is going to weather the storm and gain traction once again the US. and if it couldn't, it's not going to be much of a problem, especially now that the US economy is on the shitbox so they can't really provide as much financial upturn for Binance. China is the name of the game now, as well as other neighboring countries, should we see changes in the outlook of China towards crypto, we can pretty much disregard this whole SEC conundrum altogether.

Well the sec lost against ripple. based on that case I could agree with you that bnb is not a security.

but binance may need to go to court to win out.

[Husires]

Binance has a US website and struggles to comply with regulatory restrictions and responds to all government requests, so I don't think they will leave the US market easily. .US seems safer and has less violations or manipulation than .com because the eyes there are watching most suspicious movements.
binance.com controls a lot of things, so their collapse will not be simple or quick, and so far there is no real competition from the rest of the platforms, so at least they will exist without problems for the coming years and may survive the coming winter.

[Bountyfox]

Binance is indeed fazing significant legal challenges and scrutiny from regulatory authorities, and its ability to regain trust in the crypto industry remains uncertain. The departure of key executives at a critical time raises concerns about the company's internal dynamicz and its handling of the situation. While it's challenging to predict the future with certainty, there are several factors contributing to the belief that Coinbase could potentially surpass Binance:

Regulatory Compliance, Coinbase has been proactive in adhering to regulatory requirements and obtaining licenses, positioning itself as a more compliant and trusted platform in the eyes of regulators and investors.

Transparency, Coinbase's approach to transparency in reporting and customer communication has been seen as a positive, especially when compared to the legal challenges faced by Binance.

US Market Focus, Binance's legal issues in the U.S. may limit its ability to operate in one of the world's largest cryptocurrency markets, while Coinbase has established a strong presence there.

Customer Trust, Coinbase's reputation for security and reliability may continue to attract more users, especially those concerned about regulatory compliance and the safety of their assets.

While Binance's future is uncertain, Coinbase's focuz on regulatory compliance and transparency may position it as a more trusted and stable platform in the eyes of users, potentially leading to its surpassing Binance in the future.

[gunhell16]

While concerning, I don't think Binance is on a hot bed right now, especially when you consider the fact that BNB isn't even a security. SEC is pretty much throwing whatever they can to undermine the cryptocurrency scene in the US in favor of their CBDC, which is arguably inferior and less enticing than the superior cryptocurrency system that we have built for over a decade. Binance is going to weather the storm and gain traction once again the US. and if it couldn't, it's not going to be much of a problem, especially now that the US economy is on the shitbox so they can't really provide as much financial upturn for Binance. China is the name of the game now, as well as other neighboring countries, should we see changes in the outlook of China towards crypto, we can pretty much disregard this whole SEC conundrum altogether.

Well the sec lost against ripple. based on that case I could agree with you that bnb is not a security.

but binance may need to go to court to win out.

In addition to Ripple winning against the SEC, Grayscale also won the SEC. If they were able to face it, and Binance can for sure face it bravely, then they have overcome many things, like such issues a few years ago. So it seems normal that the problems they face are normal.

Although I can't deny that this will somehow affect the price value of BnB in the crypto market, But I personally still believe that Binance will overcome this. Binance may be in big trouble right now, but I don't think it is in a crisis situation. Everything is still under their control, as far as I can see.

[panganib999]

Saw coffeezilla's take on this and I might just have some second thoughts on the credibility of Binance, not just Binance USA. It's a little scary how they're taking shots for someone that barely makes any presence in the crypto industry (Justin Sun who is a fucking nutjob and the sketchiest person in the crypto world right now). Whatever that may be I'm thinking they have collusions and this might mean despair for everyone and binance in particular. After seeing this I shit you not I took all of my assets from Binance and redistributed them to my other hot wallets. To think that I even stood by them when CEXs are getting fingerbanged in this forum no thanks to SBF. In any case, investigation is still necessary, I think we'll find our answers sooner or later.

[DeathAngel]

I think regulators see Binance as the King Daddy exchange, what other reasons could they have to be so heavy handed. Where was this big dick energy towards FTX? Oh, I forgot, SBF paid politicians & maybe CZ doesn’t. Obviously never leave too much of your stash on exchanges but so far, Binance has proved to be very trustworthy over a long time. They have passed all proof of exchanges questions, I don’t see a reason to witch hunt them unless it’s an order to regulators from above that Binance is disturbing fiat world controls.

[armanda90]

Binance has a US website and struggles to comply with regulatory restrictions and responds to all government requests, so I don't think they will leave the US market easily. .US seems safer and has less violations or manipulation than .com because the eyes there are watching most suspicious movements.
binance.com controls a lot of things, so their collapse will not be simple or quick, and so far there is no real competition from the rest of the platforms, so at least they will exist without problems for the coming years and may survive the coming winter.

Binance have platform with US where the United State Citizen can use that exchange for trading or investing in cryptocurrency, I don't think any difference feature between Binance US or Binance.com as global due both site have the same company operation. But have legalize with United State regulation for all United State citizen not allowing for investing or trading their cryptocurrency investment trough Binance.com and they have use Binance US.

I don't with United State Citizen will leaves Binance US due not any problem facing yet and all withdrawing, deposit process running normally without get difficult withdrawing fund.

[kryptqnick]

Lawsuits are not uncommon when it comes to settling disputes in the financial area, including crypto business area. I don't think that the SEC suing Binance automatically means that Binance committed any crimes, or that Binance will go down the FTX road. With FTX, there was a clear problem of people losing a lot of money and circumstantial evidence that it may not have been a legitimate bankruptcy. But Binance seems to be doing well in that regard, so even if Binance loses the case, I think they'll just end up paying a lot of money, but they'll stay in business and remain a major exchange.
That being said, I totally agree with others in the thread that remind everyone that it's best not to keep BTC on centralized platforms.

[Aanuoluwatofunmi]

I think legal challenges often serve as a litmus test for any organization, and Binance is currently under the magnifying glass. The SEC has come down hard on Binance, bringing forth 13 charges related to securities violations. These charges revolve around allegations of wash trading and the illegal sale of BNB and BUSD tokens as unregistered securities.

Is this another new phase of challenge with Binance and the SEC or the old existing one that have already been discussed, I wish OP could just have given a reference link on this information for further clarification, however, for those using Binance, it's up to them to decide in using it continuously or changing it for a non custodial wallet, tine and good many do use the excuse for performing trades with the use of Binance but we shouldn't let all our Investment asset be on thesame exchange, they have been finding it difficult with SEC and we don't know what may be the end of this.

[Baofeng]

Lawsuits are not uncommon when it comes to settling disputes in the financial area, including crypto business area. I don't think that the SEC suing Binance automatically means that Binance committed any crimes, or that Binance will go down the FTX road. With FTX, there was a clear problem of people losing a lot of money and circumstantial evidence that it may not have been a legitimate bankruptcy. But Binance seems to be doing well in that regard, so even if Binance loses the case, I think they'll just end up paying a lot of money, but they'll stay in business and remain a major exchange.
That being said, I totally agree with others in the thread that remind everyone that it's best not to keep BTC on centralized platforms.

And I don't think that CZ is just going to sit and not answer the case by the SEC against them. Even here in our country, Binance has also been in the radar of our government. But so far no legal case has been pursue against them although we have been warned in dealings with Binance specially their P2P as there are a lot of scammers (I almost fell victim to it).

In any case though, it really up to us, we all know all that we shouldn't trust anyone here, even as big as exchange as Binance is. So just like you said, we should keep our bitcoins in our own wallet, that we have total control of.

[wallet4bitcoin]

I think legal challenges often serve as a litmus test for any organization, and Binance is currently under the magnifying glass. The SEC has come down hard on Binance, bringing forth 13 charges related to securities violations. These charges revolve around allegations of wash trading and the illegal sale of BNB and BUSD tokens as unregistered securities.

Even before the SEC lawsuit, two key figures at Binance, CZ  and former Chief Compliance Officer Samuel Lin, were charged by the CFTC for their questionable actions. The CFTC has not only issued charges but seeks to impose a payment trading and registration ban on the exchange, which would effectively mean Binance could no longer do business in the U.S. These legal battles are no trifles, and the implications are profound.

The situation at Binance reminds us of a familiar tale: FTX. Is Binance headed down the same path? One thing that can't be ignored is the timing of key personnel departures from Binance. What's even more intriguing is the timing of key personnel departures from Binance. Several high-profile executives, including  its Chief Strategy Officer, President of Compliance, and General Counsel left Binance in what appeared to be a coordinated move. While the official statement cites personal reasons for their departures, rumors suggest that these executives were not satisfied with CZ's handling of the DOJ  investigation. The timing is indeed peculiar and bears a striking resemblance to the situation that unfolded before FTX's collapse when Sam Trabucco left Almeda Research.

In the crypto world, things move fast. I think Binance is facing its biggest threat and I for one am terrified of what's to come, but they can never go down like ftx. Can Binance regain trust?

More than just a legal battle, any clamp down on Binance and its operations isn't just a clamp down on Binance alone but in the world of crypto currency exchanges, as Binance is currently leading that wing of the space. Its also a direct attack on the trust in the space as Binance has also contributed greatly to the success of global adoption of the blockchain technology.

This doesn't in anyway mean that Binance can not be investigated, but it should not painted as an exchanger with shady deals until it is proven to have violated some rule of law. This is not the first time Binance is going under the knife and I believe it won't be the last, so, its not new to me.

[DrBeer]

...."The Binance cryptocurrency exchange notified customers that it will cease issuing and servicing the Binance VISA debit card from December 2023. The reason for this decision was the closure of UAB Finansinės paslaugos Contis, the Lithuanian subsidiary of the British electronic payment operator Contis Financial Services. From December 20, UAB Finansinės paslaugos Contis will no longer be able to support the Binance Card VISA debit card program. "The Binance VISA Card will no longer be supported as of December 20, 2023. The restrictions will affect no more than 1% of our users. Exchange accounts of Binance VISA Debit Card holders will continue to function in normal mode,” said a representative of the exchange...."

https://bits.media/binance-prekrashchaet-podderzhku-debetovoy-karty-visa/

Further, they write that they recommend switching to the “safe cryptocurrency payment technology Binance Pay.”, but it seems to me that the issue is not about security, but about some legislative nuances that may follow in relation to Binance, and this is a “nice move” proactively so that then the picture didn’t look negative.

[o48o]

...."The Binance cryptocurrency exchange notified customers that it will cease issuing and servicing the Binance VISA debit card from December 2023. The reason for this decision was the closure of UAB Finansinės paslaugos Contis, the Lithuanian subsidiary of the British electronic payment operator Contis Financial Services. From December 20, UAB Finansinės paslaugos Contis will no longer be able to support the Binance Card VISA debit card program. "The Binance VISA Card will no longer be supported as of December 20, 2023. The restrictions will affect no more than 1% of our users. Exchange accounts of Binance VISA Debit Card holders will continue to function in normal mode,” said a representative of the exchange...."

https://bits.media/binance-prekrashchaet-podderzhku-debetovoy-karty-visa/

Further, they write that they recommend switching to the “safe cryptocurrency payment technology Binance Pay.”, but it seems to me that the issue is not about security, but about some legislative nuances that may follow in relation to Binance, and this is a “nice move” proactively so that then the picture didn’t look negative.

I saw this news in my feed and it immediately made me to change my stance from Binance legal troubles are "not an issue", to "binance is in deep trouble".
No other exchanges have faced this in europe, crypto.com visa card keeps working just fine. So this is definitely personal attack against Binance alone.

I am not sure why you posted not-english link to english section, as there are lots of english links available.

I made a thread about it earlier:
https://bitcointalk.org/index.php?topic=5471098.msg63028697#msg63028697

[m2017]

I think legal challenges often serve as a litmus test for any organization, and Binance is currently under the magnifying glass. The SEC has come down hard on Binance, bringing forth 13 charges related to securities violations. These charges revolve around allegations of wash trading and the illegal sale of BNB and BUSD tokens as unregistered securities.

SEC clings to such accusations to everyone it can. Do they really want to sue more money for the benefit of the budget?

Even before the SEC lawsuit, two key figures at Binance, CZ  and former Chief Compliance Officer Samuel Lin, were charged by the CFTC for their questionable actions. The CFTC has not only issued charges but seeks to impose a payment trading and registration ban on the exchange, which would effectively mean Binance could no longer do business in the U.S. These legal battles are no trifles, and the implications are profound.

Changes, not consequences, will emerge from these legal battles. But I don’t think that CZ won’t come up with anything to get out of this mess without losses. Binance is no longer a small company, but a huge corporation with the same enormous resources and capabilities. I am sure that Binance will find a way to prevent SEC from defeating them.

The situation at Binance reminds us of a familiar tale: FTX. Is Binance headed down the same path? One thing that can't be ignored is the timing of key personnel departures from Binance. What's even more intriguing is the timing of key personnel departures from Binance. Several high-profile executives, including  its Chief Strategy Officer, President of Compliance, and General Counsel left Binance in what appeared to be a coordinated move. While the official statement cites personal reasons for their departures, rumors suggest that these executives were not satisfied with CZ's handling of the DOJ  investigation. The timing is indeed peculiar and bears a striking resemblance to the situation that unfolded before FTX's collapse when Sam Trabucco left Almeda Research.

It is unlikely that Binance follows the scenario of FTX.

In the crypto world, things move fast. I think Binance is facing its biggest threat and I for one am terrified of what's to come, but they can never go down like ftx. Can Binance regain trust?

They can.

[DrBeer]

...."The Binance cryptocurrency exchange notified customers that it will cease issuing and servicing the Binance VISA debit card from December 2023. The reason for this decision was the closure of UAB Finansinės paslaugos Contis, the Lithuanian subsidiary of the British electronic payment operator Contis Financial Services. From December 20, UAB Finansinės paslaugos Contis will no longer be able to support the Binance Card VISA debit card program. "The Binance VISA Card will no longer be supported as of December 20, 2023. The restrictions will affect no more than 1% of our users. Exchange accounts of Binance VISA Debit Card holders will continue to function in normal mode,” said a representative of the exchange...."

https://bits.media/binance-prekrashchaet-podderzhku-debetovoy-karty-visa/

Further, they write that they recommend switching to the “safe cryptocurrency payment technology Binance Pay.”, but it seems to me that the issue is not about security, but about some legislative nuances that may follow in relation to Binance, and this is a “nice move” proactively so that then the picture didn’t look negative.

I saw this news in my feed and it immediately made me to change my stance from Binance legal troubles are "not an issue", to "binance is in deep trouble".
No other exchanges have faced this in europe, crypto.com visa card keeps working just fine. So this is definitely personal attack against Binance alone.

I am not sure why you posted not-english link to english section, as there are lots of english links available.

I made a thread about it earlier:
https://bitcointalk.org/index.php?topic=5471098.msg63028697#msg63028697

I found the article I published on Russian-language information sites, with the assumption that it would not be too difficult to make an online translation into the language of the reader
If we get back to the topic, I would not call it a "targeted attack on Binance". Whether we like it or not, we need to assess the situation realistically. There have been many well-reasoned claims against Binance in recent years. And it should be recognized that Binance did not make any significant attempts to change the situation and settle it before the strict measures were introduced against them. It is always possible to find a compromise between earnings and the requirements of the legal framework of those countries where you provide these services, or in relation to the citizens of those countries that require, legally, to comply with their legal framework in relation to users of Binance platforms who are citizens of such countries.