The U.S. Securities and Exchange Commission (SEC)’s former head of internet enforcement has warned that Binance’s recent motion accusing the regulator of ethical violations could expedite criminal charges against the crypto exchange. “Binance’s motion is provocative and Binance’s antagonistic, arrogant, accusatory, and unorthodox ethics battle-cry could fan the flames of whatever Binance-related criminal prosecution is cooking,” the former SEC official cautioned.
‘Binance Will Regret Having Ever Filed This Motion’
Former U.S. Securities and Exchange Commission (SEC) official John Reed Stark has provided insight into the potential consequences of Binance’s recent motion against the regulator, stating that it could expedite the process of bringing criminal charges against the cryptocurrency exchange. Stark is currently president of cybersecurity firm John Reed Stark Consulting. He founded and served as chief of the SEC Office of Internet Enforcement for 11 years. He was also an SEC enforcement attorney for 15 years.
The former SEC official explained in a tweet Thursday that filed a motion on Wednesday asking the judge overseeing the SEC-Binance enforcement case to prevent SEC attorneys from making public statements asserting that Binance and CEO Changpeng Zhao (CZ) “have mishandled the assets of US-based customers.”
The crypto exchange claimed that the securities regulator “has not presented evidence of any alleged commingling” and argued that the watchdog’s publicly stating that Binance has mishandled customer assets “risks tainting the jury pool,” Stark detailed, adding:
My take is that Binance will regret having ever filed this motion.
While acknowledging the potential benefits of Binance’s proposal, including the possibility of prompting the SEC to exercise more caution and restraint in its statements regarding the global crypto exchange, Stark emphasized: “Using litigation as marketing theater is never recommended when there exists a criminal indictment that is being contemplated or is already filed under seal, which is, IMHO, exactly the situation with Binance.”
The former SEC internet enforcement chief continued:
The stark reality is that Binance’s motion is provocative and Binance’s antagonistic, arrogant, accusatory and unorthodox ethics battle-cry could fan the flames of whatever Binance-related criminal prosecution is cooking and instigate criminal prosecutors to act now against Binance.
Stark further pointed out that in its pleadings, the SEC stated: “It has also been widely reported that Binance and Zhao are under investigation by criminal authorities in the United States.”
He emphasized, “This sort of statement in an SEC pleading is unusual and rare,” noting that “Normally, the SEC is silent about any sort of parallel criminal investigation, especially in its pleadings and public statements.” Stark believes that by mentioning the criminal investigation, “the SEC is obviously working with criminal prosecutors and FBI agents — and infers that criminal action could be imminent.”
Stark opined:
By poking the bear and accusing the SEC staff of ethical violations and by alleging that the SEC is making misleading statements about Binance’s alleged fraud and market manipulation, Binance is essentially daring the criminal authorities to prove Binance wrong.
“This is not a good look for a company already entangled in dynamic and multi-faceted prosecutorial crosshairs,” he noted. The former SEC internet enforcement chief also pointed out that there are already reports that Binance is under investigation by French investigators for alleged money laundering.
Earlier this month, Stark urged investors to get out of crypto platforms now, warning that “crypto platforms are under a U.S. regulatory/law enforcement siege which has only just begun.”
Do you agree with former SEC official John Reed Stark that Binance shouldn’t have filed the motion above? Let us know in the comments section below.
by Kevin Helms via Bitcoin News
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