Crypto: allegation for Binance US after the SEC

Crypto news: after the SEC’s charges against Binance US come those of Senator Elizabeth Warren.

Warren has been against cryptocurrencies for a long time, so much so that she has started a real smear campaign against the crypto market. 

The senator is part of the Democratic Party, which is the one most opposed to crypto markets, even though she was part of the Republican Party until 1996. 

Given that the US presidential elections will be held next year, it is possible that this initiative of hers also has propaganda purposes. 

Crypto news: Warren’s allegations against Binance US after those of the SEC

A couple of days ago, Elizabeth Warren sent a letter to US Attorney General Merrick Garland, countersigned by Senator Chris Van Hollen, who is also from the Democratic Party. 

The letter begins by pointing out to Garland that Binance.US is under investigation by the SEC for blatant noncompliance with federal securities laws. 

It then points out that Binance.US may also have made a series of false statements to Congress by responding to the letter of 1 March 2023 requesting clarification of their activities. 

In that response Binance US claimed that Binance and Binance.US were “separate entities” and that Binance.US “prioritized regulatory compliance.” 

According to Warren, these statements were false. 

It is important not to forget that the exchange for the US market, namely Binance.US, does not belong to Binance, but to an American company that uses the brand name. 

However, according to the SEC, this American company is allegedly controlled by the CEO of Binance. 

Warren told Garland that the letter he received from Binance.US is confidential, but that he will send it to his department so that they can read it. 

Garland heads the DoJ, which is the US Department of Justice. 

According to Warren, the DoJ should conduct a prompt and thorough investigation into this matter, in cooperation with the SEC. 

The SEC is not part of the US government, but a federal agency controlled by the government itself. 

DoJ’s investigation into Binance

In reality, according to what Reuters revealed some time ago, the DoJ launched an investigation into Binance as early as 2018, so Senator Warren’s letter seems decidedly unnecessary. 

Perhaps the only thing still unknown to the DoJ is the text of the letter sent by Binance US to the Senate committee of which it is a member, but it is hard to imagine that the DoJ was unaware of the existence of that letter. 

So either Warren’s initiative is to ask the DoJ to intensify and deepen the investigation, or it is purely for propaganda purposes. 

In any case, the fact remains that there are several US agencies or institutions that are investigating Binance US, and have been doing so for some time. 

At this point, the likelihood that the company will come out completely unscathed seems less and less. 

It is worth noting that Binance US is not Binance, and these investigations do not involve the international exchange Binance.com, which is the world’s largest crypto exchange. 

Binance US: withdrawal from the US crypto market

In light of what is happening, it appears that Binance is beginning to consider withdrawing from the US market. 

Today, Binance US officially announced that it has suspended dollar (USD) deposits on the platform intended for the US market, and will also suspend withdrawals next Tuesday. 

Although this initiative applies only to Binance.US, and not to Binance.com, it is worth mentioning that in theory the large international exchange Binance.com is not supposed to serve US customers. 

Therefore, if all of Binance’s U.S. customers stay on Binance.US, and if dollars can no longer be used on the latter platform, it is very likely that it may lose further market share. 

Truth be told, Binance.US has never been able to carve out a significant market share in the U.S., whereas Binance.com dominates the global crypto markets. Coinbase and other US exchanges dominate in the US, where USD deposits and withdrawals will continue to be available. 

Not even the bankruptcy of FTX, i.e., the second largest US exchange after Coinbase, has helped Binance.US carve out a major share of the US market, and now that it will no longer even offer USD deposits and withdrawals, it may lose many users and a lot of trading volume. 

The suspension of USD deposits and withdrawals is theoretically temporary, but for now no timeframe has been given. 

Should the SEC’s lawsuit proceed successfully, at this point it comes to mind that Binance might also decide to leave the US market, just as it has already done in the stablecoin market by stopping support for Binance USD (BUSD). 

CZ’s communication

According to Odaily reports, Binance co-founder and CEO Changpeng CZ Zhao sent a notice to employees regarding their internal communications, stating that anything they say could end up in court, or on the Internet. 

In addition, CZ claims that the disclosure of internal communications has already caused a lot of damage to the company’s reputation, so much so that he says that employees who are not satisfied working at Binance would be better off leaving. 

The situation therefore appears very tense, although this is not the first time the exchange has had to deal with similar attacks. However, this time the attack is in force, and it comes from very powerful institutions. 

The allegations are serious, although for now limited to activity in the US. However, it cannot be entirely ruled out that in the future other government agencies in other countries may also follow the SEC’s example, especially if it is successful. 

However, it is important not to forget that other exchanges are also experiencing similar problems, including Coinbase itself, which is the largest US crypto exchange.