- Binance.US has hired former co-director of the SEC’s enforcement division, George Canellos to defend it against charges filed by the SEC.
- The SEC has accused Binance.US of major malfeasance and legal violations, including mishandling customer funds and misleading investors and regulators.
- Binance.US has disputed these allegations, describing them as “simply wrong,” and its lawyers have contested the SEC’s request for a temporary restraining order.
In a significant move indicating the seriousness of its ongoing legal battle, Binance.US, the American arm of the global cryptocurrency exchange Binance, has recruited George Canellos, a former co-director of the Securities and Exchange Commission’s (SEC) enforcement division, as part of its defense team. This news comes on the heels of a lawsuit filed against the exchange by the SEC, alleging major malfeasance and legal violations that could potentially lead to the prohibition of Binance.US’s operations in the country.
Canellos, who previously oversaw approximately 1,300 attorneys at the SEC and served as the chief of the major crimes unit at the U.S. Attorney’s Office in the Southern District of New York, will bring his considerable experience to the table as Binance.US faces these serious allegations.
In addition to Canellos, three other Milbank LLP lawyers have also been recruited. These include Adam Fee, Matthew Laroche, and Andrew LeBlanc, each bringing a wealth of knowledge and a wide range of expertise to the legal battle.
The Allegations and Binance.US’s Defense
The SEC’s lawsuit, filed in early June, accuses Binance of severe violations, including mishandling customer funds and misleading investors and regulators. The regulator has also applied for a temporary restraining order to freeze Binance.US’s assets to protect customer funds.
However, Binance.US has rebelled against these accusations, declaring them “simply wrong.” It has pledged to “vigorously defend” itself, and these high-profile legal appointments suggest that they are preparing for an intense courtroom battle. The company’s lawyers are disputing the SEC’s request for a temporary restraining order, arguing that there’s no risk to customer assets.
A notable point of contention lies in the timing of the SEC’s charges. Binance’s legal team has questioned why the SEC allowed the platforms to grow to their current size if they were always considered illegal. They’ve also criticized the SEC’s approach, which eschews rulemaking in favor of ad-hoc enforcement, violating the Administrative Procedure Act.
Implications for the Crypto Industry
This courtroom drama between Binance.US and the SEC holds severe implications for the broader cryptocurrency industry, which is closely watching the outcome. As regulatory scrutiny intensifies, hiring legal heavyweights like Canellos and his team could become a trend among other exchanges facing similar legal challenges.
However, Binance.US is gearing up for a comprehensive defense. As John Reed Stark, a former SEC Office of Internet Enforcement Chief, noted, “Binance is preparing for a criminal prosecution and continuing to hire the best defense attorneys in the world.” In these turbulent times for the crypto industry, Binance.US and the SEC’s responses could set precedents for future crypto regulatory cases.
