SEC Files Sealed Motion against Binance Causing Fear and Uncertainty in Crypto Market

UTC by Steve Muchoki · 3 min read
SEC Files Sealed Motion against Binance Causing Fear and Uncertainty in Crypto Market
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Former chief of SEC office of Internet enforcement John Reed Stark argued that the rare move by the agency could spell criminal investigation for Binance and the accused persons.

The future of the Binance cryptocurrency exchange in the United States is at stake after the Securities and Exchange Commission (SEC) filed a sealed motion on Monday. The move coincided with the ruling that the SEC failed to provide sufficient supportive evidence to deny Grayscale Investments’ application to convert its GBTC to a spot Bitcoin ETF. Notably, the Securities and Exchange Commission filed 37 supportive submissions including multiple exhibits, a proposed order, and a declaration of SEC trial attorney Jennifer Farer.

The move by the Securities and Exchange Commission has most crypto investors speculating on the nature of the attack on the leading digital asset exchange Binance. Moreover, Binance is already under investigation by several United States agencies for allegedly violating money laundering regulations. Additionally, the crypto firm has already been charged by the CFTC and the SEC for allegedly operating an illegal exchange.

Legal Experts Take on the SEC’s Sealed Motion against Binance

According to John Reed Stark, a former SEC Chief of Internet enforcement and current senior lecturer at Duke University School of Law, the United States Securities and Exchange Commission hardly files a sealed motion against its defendants in a bid to send a message to future violations. As a result, Stark argued that Binance could potentially be facing a criminal investigation or prosecution conducted by the United States Department of Justice (DoJ).

Notably, Stark highlighted that the DoJ could be working with confidential informants or running an undercover operation against the cryptocurrency exchange. Otherwise, Stark highlighted that the sealed motion could be a reduction geared towards protecting a witness or a company.

“In my opinion, and this is only a guess, the US SEC‘s secret and extraordinary court filing, which appears to be highly comprehensive, likely touches upon nonpublic Binance-related money laundering allegations or other potential criminal conduct. In other words, my take is that the secret US SEC filing likely relates to an existing US DOJ investigation of Binance,” Stark noted.

In this regard, Stark added that Binance is less likely to oppose the US SEC’s sealed motion to avoid jeopardizing any evidence. Nonetheless, he further noted that Binance could proceed and oppose the motion in a bid to ensure transparency with its investors and users.

“If Binance does oppose the US SEC seal request, then the US SEC motion more likely relates to the US SEC’s desire to keep the identity of a witness secret, and Binance would prefer that the world know the names of any of Binance’s accusers,” he added.

Market Outlook

Binance native coin BNB gained about 3.2 percent in the past 24 hours to trade around $224 during the early London session on Tuesday. Already, the United States SEC has indicated that BNB is a security asset due to the high centralization of Binance.

Binance News, Blockchain News, Cryptocurrency News, News
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