Binance’s Mortal Blow: SEC and Lawsuits Shake the Crypto Exchange

Binance, a popular cryptocurrency exchange, is facing ongoing legal challenges, particularly in the United States. After a lawsuit from the Securities and Exchange Commission (SEC) in June 2023, Binance had to lay off over 200 employees as its revenues took a hit. Now, the SEC claims that Binance is unwilling or unable to provide information regarding the custody of customer assets. The regulator has requested court intervention to speed up the process of gathering evidence. The SEC is specifically investigating whether Binance employees outside of the US had access to customer assets held on Binance.US. Binance.US has denied these allegations and argued that it has complied with the SEC’s requests for information.

In another legal setback for Binance, a US appeals court recently overturned the dismissal of a class-action lawsuit filed by investors. The lawsuit, led by investor Chase Williams, accuses Binance of selling securities without being registered as an exchange or broker-dealer. The district court had initially dismissed the lawsuit, citing the investors’ claims as untimely. The appeals court ruled in favor of the investors, stating that Binance is subject to domestic securities laws and that the initial filing was timely.

The extradition case of Do Kwon, co-founder of Terraform Labs, has taken another turn. A court in Montenegro has overturned a previous decision to extradite Kwon to the United States. The Appellate Court of Montenegro argued that the previous order was affected by significant violations of local criminal procedure laws. Kwon’s extradition has been requested by both the US and South Korea, leading to a disagreement over where he should be sent.

In the United States, the Virginia Senate has passed a significant bill that establishes a workgroup dedicated to studying the cryptocurrency ecosystem. The workgroup will consist of 13 members from the Senate, House of Delegates, blockchain industry, and local government. Their goal is to study the crypto industry and make recommendations to support its expansion by November 2024.

In Spain, the Spanish Agency for the Protection of Data (AEPD) has ordered Worldcoin, a controversial cryptocurrency project, to stop collecting and processing data in the country. The AEPD’s temporary order comes as they investigate complaints of users in Spain being unable to withdraw consent and Worldcoin allegedly collecting data from minors. This action follows a similar investigation by Hong Kong’s Office of the Privacy Commissioner for Personal Data. Worldcoin is known for its use of biometric scanning devices called “orbs” that require users to have their eyes scanned for identification.

Binance continues to face legal obstacles, with ongoing SEC investigations and the overturning of previous court rulings. The extradition case of Do Kwon remains unresolved, and regulatory actions against cryptocurrency projects like Worldcoin highlight the growing concerns over data privacy and security.

6 thoughts on “Binance’s Mortal Blow: SEC and Lawsuits Shake the Crypto Exchange

  1. Worldcoin collecting data from minors? That’s absolutely unacceptable!

  2. Virginia Senate’s move to establish a workgroup dedicated to studying the cryptocurrency ecosystem is a step in the right direction! 👏 It’s important to understand and support the industry’s growth.

  3. The extradition case of Do Kwon taking another turn is quite the roller coaster! It’s interesting to see the disagreements over where he should be sent.

  4. The Court of Montenegro did the right thing by overturning the extradition ordertoo many violations.

  5. It’s good to see the Virginia Senate taking steps to study the cryptocurrency ecosystem, but Binance is definitely not going to benefit from this.

  6. Seriously, how can Binance claim it’s compliant when it can’t even provide information on customer assets? 😡

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