Binance Faces Potential Criminal Charges, Warns Former SEC Official

The world’s largest cryptocurrency exchange, Binance, is likely to face criminal prosecution, according to former SEC officer and legal expert John Reed Stark. Following recent litigation filed by the SEC and CFTC against Binance for alleged securities breaches and aiding and abetting violations, this information has come to light. Stark adds that these accusations have more in common with criminal charges than with regulatory measures.

Stark points out that the SEC’s case focuses on charges of commingling customer funds and market manipulation, but the CFTC’s lawsuit accuses Binance of aiding and abetting violations. He draws attention to the SEC’s urgent need for remedial measures, such as asset freezing and money repatriation, indicating that it believes fraud has been perpetrated and investor funds are at risk.

Collaboration Between Regulatory Agencies and DOJ Expected

Stark contends that the SEC’s accounting declaration, which makes mention of fund blending and asset transfers, shows cooperation with federal law enforcement officials. He also makes the assumption that the DOJ is probably involved in the case and has set aside resources for a money laundering criminal prosecution, a subject not substantially discussed by the SEC or CFTC complaints.

Stark believes that the DOJ is probably collaborating with the SEC, CFTC, and a number of informants or whistleblowers. He ends his research by speculating that the DOJ will file or unseal criminal charges against Binance as the next move. He opined, “The SEC is obviously working with criminal prosecutors and FBI agents but reveals no other information. Neither the CFTC or SEC case intensely focus on money laundering. IMHO, that is the prosecutorial space that has been carved out and reserved for a U.S. DOJ criminal prosecution relating to Binance.”

His concluded the Tweet by stating, “My take is that [the] U.S. 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.”

The SEC’s accusations against Gemini and Genesis and Stark’s earlier statements regarding regulatory enforcement in the cryptocurrency industry point to an increase in regulatory scrutiny. When asked if DOJ indictments may be sealed, Stark responds that they might be kept secret from the public to stop the loss of assets or the destruction of evidence.