Binance Likely To Face Criminal Indictment From The DoJ, Says Former SEC Official
Key Takeaways:
An ex-SEC official has said there are signs Binance might face a criminal indictment soon.
The FUD resulted in the BNB price confirming a bearish pattern.
PATNA (CoinChapter.com) — Binance might face more trouble than the SEC lawsuit against the firm and its CEO. An ex-SEC official has speculated that the US Department of Justice might be planning to file a criminal indictment related to Binance.
John Reed Stark, author and former chief of SEC’s Office of Internet Enforcement (OIE), stated that several signs suggested that the DoJ might file (or has already filed under seal) a Binance-related criminal indictment.
Stark noted that the CFTC and SEC complaints against the exchange read more like criminal indictments than regulatory complaints. The former SEC official highlighted that the CFTC complaint alleged that Binance colluded with customers to circumvent compliance laws.
Moreover, the complaint alleged that Binance’s former chief compliance officer, Samuel Lim, lied to a regulator about the compliance practices at the exchange. The CFTC also alleged that Binance CEO Changpeng Zhao and Lim were responsible for certain “activities outside the US” that undermined CFTC regulations.
Furthermore, Stark highlighted that the SEC complaint against Binance and its CEO had language similar to CFTC’s complaint.
The SEC alleges that certain Binance entities and Zhao co-mingled billions of dollars in customer funds and secretly sent them to a separate company controlled by Zhao, enriching themselves by billions of US dollars
Start highlighted in his statement.
FTX-Like Behaviour Could Mean Doom For Binance
The former SEC-OIE chief also observed that some of Binance’s alleged crimes echoed those that brought down FTX in 2022. The SEC’s complaint also included charges of market manipulation against Zhao.
FTX founder Sam Bankman-Fried faced criminal charges after regulatory bodies brought up similar charges in the FTX scandal.
Obstruction Of Justice
In addition, the complaints against Binance and Zhao include allegations of obstruction of justice. The CFTC complaint claimed that Zhao instructed Lim to notify VIP customers of “law enforcement inquiries concerning their accounts.”
Also Read: Tether (USDT) Claims Safe-Haven Status Amid the SEC Mess
The SEC also alleged that Binance and Zhao used Silvergate and Signature banks to transfer funds, fiat, and crypto, among several Zhao-controlled companies. The exchange warned several users of enforcement actions against their accounts to help VIP customers evade compliance laws.
Since the CFTC or SEC complaints do not focus intensely on the money laundering aspects of Binance’s alleged crimes, Stark believes the DoJ might step in with an indictment.
My take is that US DOJ is working with the SEC, CFTC and multiple informants/whistleblowers, and the next axe to fall is the filing, or unsealing of, Binance-related criminal charges
John Reed Start concluded.
BNB Price Confirms Bearish Pattern
Meanwhile, Binance Coin’s price continued to reel from the lawsuit-related FUD. A fall in the exchange’s native token’s price confirmed a bearish pattern called the ‘Rising Wedge.‘
Two upwards-sloping and converging trendlines, joining higher highs and higher lows, form the said structure. Declining trading volumes often accompany a breakdown below the pattern.
The price target of the pattern is equal to the height of the back of the wedge. From the breakdown point (orange line), the calculated price target for BNB was $142, a drop of nearly 50% from the breakdown level of $282.
Moreover, the BNB token price had fallen by over 20% since breaking out of the pattern before it started moving horizontally around June 11. At writing, BNB was changing hands at $234, down 0.5% on the day.
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Filed under: Bitcoin - @ June 12, 2023 11:30 am