The recent $4.3 billion settlement between Binance and various U.S. government agencies, announced by top Biden administration officials, has sparked controversy due to the absence of Securities and Exchange Commission (SEC) Chair Gary Gensler at the announcement.
The presence of Attorney General Merrick Garland and Treasury Secretary Janet Yellen, but the absence of SEC Chair Gary Gensler, has raised concerns, particularly in light of the SEC’s ongoing legal dispute with Binance. According to insiders familiar with the matter, the SEC was not part of the extensive settlement talks that led to Binance and its founder, Changpeng Zhao (CZ), pleading guilty and resolving civil charges with the U.S. Treasury Department.
The SEC’s absence highlights the challenges and high stakes involved in settling with a regulatory body that, while lacking the authority to imprison individuals, possesses significant power to disrupt and potentially shut down U.S. companies operating in the crypto space.
Futile attempts at reaching settlement with SEC
Before the SEC filed its lawsuit against Binance in June, efforts to reach a settlement were reportedly unsuccessful as the parties could not agree on terms.
Sources cited by the Wall Street Journal indicate that a settlement on the SEC’s terms could have potentially required Binance to close a significant portion of its U.S. crypto trading operations and acknowledge allegations that its “affiliates engaged in manipulative trading.” The challenges in reaching a settlement underscore the complexities and disagreements between regulatory bodies and crypto entities in defining and accepting terms of compliance.
The report also mentioned that before filing the lawsuit against Binance, various government agencies attempted to secure an injunction from the company. This deal would have reportedly prohibited Binance’s U.S. arm from offering trading in many of the tokens listed at that time.
Lee Reiners, an economics lecturer at Duke University, commented that accepting such an injunction would likely signify the end of Binance.US. However, Binance seems resolute in defending its case against the SEC. In a statement, the company said, “We remain confident in our case against the SEC and will continue to defend our platform vigorously.” This indicates the company’s commitment to contesting the allegations brought forth by the regulatory body.
