The Justice Department’s money laundering unit asked the world’s largest crypto exchange nearly two years ago to hand over messages from CEO Changpeng Zhao and other executives on matters including its detection of illegal transactions and US customer recruitment, according to the report. US authorities have an ongoing investigation into whether Binance violated the Bank Secrecy Act, Reuters reported Thursday, after federal prosecutors began probing the company and its CEO in December 2020. “We work with agencies regularly to address any outstanding questions,” Binance spokesperson said.The Bank Secrecy Act is mostly concerned with anti-money laundering controls."I would imagine that other firms spooked by the prevalent trend for regulation by enforcement will follow suit," said Katharine Wooller, business unit director at Coincover, a provider of insurance for digital assets. Executives said they expected exchanges to continue to expand into international regions that have more favorable regulations.Ĭoinbase, for example, has previously said it would consider moving its global headquarters outside of the U.S. that crypto intermediary compliance isn't possible," Gensler said in a speech on Thursday, adding however that "it takes work."Īccording to analysts at Bernstein, roughly 90% of crypto trading already takes place outside the U.S. Gensler has suggested an industry shake-out would be good for investors. I think what they are engaging in is a coordinated campaign to essentially destroy the crypto economy in the United States," Stuart Alderoty, chief legal officer at Ripple, told the Piper Sandler Global Exchange & Fintech Conference in New York on Wednesday. "I don't think that this SEC under this leadership necessarily cares whether they win or lose in the courts. While big crypto companies can afford to fight the SEC, smaller companies have filed for bankruptcy following SEC enforcement actions, including crypto exchange Beaxy. An SEC suit alleging Ripple's XRP token is a security, for example, has been under litigation for more than two years.īut whether the SEC wins or loses, the suits send a strong signal to the industry that the agency is not going to let up, executives said. The latest lawsuits will play out in court, which could take years. Gemini, and Okcoin did not immediately respond to a request for comment. We will continue to closely monitor this case and others for precedential rulings," a spokesperson for Kraken said. For every asset we list, our teams conduct thorough risk and security evaluations which includes a comprehensive legal and compliance process. regulators, and possibly the Department of Justice, in the next few weeks," said Scott Freeman, co-founder of JST Digital, a financial services firm focusing on digital assets.Ī spokesperson for the Justice Department declined to comment.Ĭrypto companies, including Coinbase and Binance, dispute the SEC's authority, saying many tokens are more akin to commodities, and have repeatedly called for regulators to create clear rules rather than assert their jurisdiction via enforcement actions. "We would not be surprised to see more lawsuits from the U.S. The Coinbase and Binance suits this week expand that list to include some commonly traded tokens, such as Solana, Cardano and Polygon. The agency has brought more than 130 crypto lawsuits and settlements to date, according to data from consultancy Cornerstone Research and the SEC website, and in several of those cases has named specific tokens as securities.
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