Two US lawmakers have asked the Department of Justice to look into whether Binance made false representations to lawmakers earlier in March about its business dealings and ties to its local unit, Bloomberg reported on Thursday. Senators Elizabeth Warren and Chris Van Hollen made the request in a letter sent to the US Attorney General, Merrick Garland, according to the outlet.
Lawmakers Doubt Binance’s Response
In March, Warren, Hollen and another US Senator Roger Marshall questioned Binance about its regulatory compliance and finances as well as the independence of its US arm. In response, Patrick Hillmann, Binance’s Chief Strategy Officer, said the crypto exchange prioritized local regulatory compliance as it grew. He added that “Binance.com and Binance.US are separate entities — contrary to suggestions in public reporting.”
However, the senators in their letter said Binance and its US branch seemingly “undermined this important investigation” by providing inaccurate information to Congress, Bloomberg reported, quoting the letter.
SEC Moves against Binance
The report about the senator’s letter emerged days after the US securities watchdog charged Binance to court for allegedly operating illegal trading platforms, offering unregistered crypto asset securities and commingling customers’ funds. In addition, the regulator claimed that Binance’s global entity and its US affiliates ‘were intimately involved’ in running Binance.US, the trading platform for US investors.
In addition, the Securities and Exchange Commission (SEC) accused Binance of tweaking its controls to enable high-value US customers to trade on Binance.com, contrary to the exchange’s public claim that US clients were barred from using the global trading platform.
Today we charged Binance Holdings Ltd. (Binance); U.S.-based affiliate, BAM Trading Services Inc., which, together with Binance, operates https://t.co/swcxioZKVP; and their founder, Changpeng Zhao, with a variety of securities law violations.https://t.co/H1wgGgR5irpic.twitter.com/IWTb7Et86H
— U.S. Securities and Exchange Commission (@SECGov) June 5, 2023
Responding to the lawsuit, Binance accused the SEC of rushing 'to claim jurisdictional ground from other regulators' rather than seeking to serve the interest of investors. The crypto exchange said allegations that its users' assets in the US are at risk are "simply wrong.”
Our response to the SEC's complaint.https://t.co/mgXxGTKr67
— Binance (@binance) June 5, 2023
In recent months, the SEC has intensified its regulatory crackdown on digital asset exchanges. On Tuesday, it sued Coinbase, the country’s largest cryptocurrency trading platform, on allegations that it is operating an illegal exchange and offers unregistered securities and a crypto staking programme. The charges came a day after the financial watchdog's action against Binance.
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This article was written by Solomon Oladipupo at www.financemagnates.com.
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