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Following the lawsuit filed by the US Securities and Exchange Commission (SEC) against Binance and its CEO, Changpeng Zhao (CZ) on June 5, and the temporary freezing of the US branch of the exchange, Binance.US, and CZ’s assets by court order, discussions continue with new participants. John Reed Stark, who alleges the US Department of Justice may have already taken or is about to take action against Binance, has made a chilling assessment.
“US Department of Justice Will or May Have Prepared an Indictment”
Stark, who spent 19 years in the SEC and served as chairman of the US regulator, tweeted from his personal Twitter account, “There are numerous indications that the US Department of Justice will prepare or has prepared an indictment against Binance.”
He further added, “In my view, the charges laid out in the lawsuits brought by the Commodity Futures Trading Commission (CFTC) and SEC read like indictments filled with allegations of fraud, deception, obstruction of justice, and money laundering.”
According to the veteran authority, the US Department of Justice may have or is preparing an indictment against the crypto exchange.
Binance Under Regulator Siege
On June 5, the SEC filed a lawsuit against Binance, the world’s largest crypto exchange by volume, for various violations of the country’s securities laws. The regulatory agency also asked the court to temporarily freeze the assets of Binance’s US branch, Binance.US, and its owner CZ, a request that the court accepted.
On the other hand, the 76-page claims put forth by the CFTC against Binance argue that some parties in the crypto exchange were aware of the exchange being used for criminal activities, draw parallels with the bankrupt FTX, and open the door for the US Department of Justice to charge the exchange with money laundering.
Stark said, “Neither the CFTC nor SEC cases are heavily focused on money laundering. It actually creates a carved and reserved prosecution area for the US Department of Justice to file a lawsuit against Binance.”
In his assessment of Binance, Stark stated, “In my opinion, the US Department of Justice is working with the SEC, CFTC, and numerous whistleblowers, and the next ax to fall will be the filing or unsealing of criminal charges against Binance. Failure puts you in danger.”
Binance.US is preparing its legal defense against US regulators and added four lawyers from Milbank LLP, including George Canellos, former co-director of the SEC’s Enforcement Division, to its legal team.
