Tag: us sec

Binance Operations Declared Illegal by Nigerian Market Regulator, Asked to Discontinue

Nigeria’s markets regulator has ordered the world’s largest cryptocurrency exchange Binance to halt its operations in the country, saying a local unit that courted Nigerian investors through a website was illegal.

“Binance Nigeria Limited is hereby directed to immediately stop soliciting Nigerian investors in any form whatsoever,” the Securities and Exchange Commission (SEC) said in a statement dated June 9. It said the company was not registered or regulated, making it illegal.

Binance could not be immediately reached for comment.

The US Securities and Exchange Commission this week sued Binance and Coinbase for allegedly breaching its rules.

Last year, Nigeria’s SEC published a set of regulations for digital assets, signalling Africa’s most populous country was trying to find a middle ground between an outright ban on crypto assets and their unregulated use.

That was after Nigeria’s central bank in 2021 banned banks and financial institutions from dealing in or facilitating transactions in digital currencies.

Nigeria’s young, tech-savvy population has eagerly adopted cryptocurrencies, for example using peer-to-peer trading offered by crypto exchanges to avoid the financial sector ban.

Meanwhile, the US affiliate of Binance said it was halting dollar deposits and gave customers until Tuesday to withdraw their dollar funds, after the US securities regulator asked a court to freeze its assets.

Binance.US, the purportedly independent partner of Binance, said in a tweet on Thursday that its banking partners were preparing to stop dollar withdrawal channels as early as June 13.

The SEC sued Binance, its CEO and founder Changpeng Zhao, and Binance.US’s operator on Monday, in a dramatic escalation of a crackdown on the industry by US regulators. The SEC sued major US exchange Coinbase a day later.

Binance.US said in the tweeted customer notice that it would no longer accept dollar deposits as part of plans to change to a “crypto-only exchange”. It called the SEC’s civil charges “unjustified” and said it would “vigorously defend” itself.

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(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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Binance.US Halts Dollar Deposits After SEC Crackdown, Asks Customers to Withdraw Dollar Funds

The US affiliate of Binance said it was halting dollar deposits and gave customers until Tuesday to withdraw their dollar funds, after the US securities regulator asked a court to freeze its assets.

Binance.US, the purportedly independent partner of Binance, said in a tweet on Thursday that its banking partners were preparing to stop dollar withdrawal channels as early as June 13.

The SEC sued Binance, its CEO and founder Changpeng Zhao, and Binance.US’s operator on Monday, in a dramatic escalation of a crackdown on the industry by US regulators. The SEC sued major US exchange Coinbase a day later.

Binance.US said in the tweeted customer notice that it would no longer accept dollar deposits as part of plans to change to a “crypto-only exchange”. It called the SEC’s civil charges “unjustified” and said it would “vigorously defend” itself.

The SEC alleged in 13 charges on Monday that Binance had in a “web of deception” artificially inflated trading volumes and diverted customer funds, as well as failing to restrict US customers from its platform.

The SEC on Tuesday asked a federal court to freeze Binance’s US assets. Binance.US called the motion “unwarranted”, saying it had addressed SEC concerns over the safety of customer assets.

The SEC said it had not received “sufficient reassurance” that Binance.US’s customer assets were controlled by its operator, BAM Trading, “rather than under the control or influence of Binance or Zhao, a person who has openly expressed his desire to avoid compliance with US law.”

Zhao and Binance had “free reign” to handle Binance.US assets, the SEC said. “They have exercised this control over US investor assets with no oversight or controls to ensure that those assets are properly secured,” it added.

Binance did not immediately reply to a request for comment. It has said it would “defend our platform vigorously,” saying the SEC was limited in reach as Binance was not a US exchange.

Binance.US’s customer assets total more than $2.2 billion. (nearly Rs. 18,100 crore) held in crypto and some $377 (nearly Rs. 3,100 crore) million in US dollar bank accounts, the SEC said.

‘Existential Threat’

BAM Trading holds customer’s funds directly with California-based Axos Bank, according to a letter from lawyers for BAM Trading to the SEC dated May 26, which was made public by the SEC on Tuesday.

Axos did not immediately respond to a request for comment sent via email.

Binance.US had struggled to find banking partners after the failure of Signature Bank, the Wall Street Journal reported in April.

In its tweet on Thursday, Binance.US said crypto-denominated trading, deposits, withdrawals and “staking” – where users deposit cryptocurrencies for use in blockchain transactions — would remain fully operational.

“This is very serious for Binance.US because Americans cannot use Binance Global,” said Clara Medalie, director of research at Kaiko.

“The inability for Binance.US to offer USD trading services in a region the exchange was specifically built to operate in is an existential threat.”

Crypto prices barely reacted to the news, with bitcoin last trading up 0.4 percent at $26,610 (nearly Rs. 22 lakh). It was headed for a weekly loss of about 1.9 percent, after having dipped to an over two-month low of $25,350 (nearly Rs. 21 lakh) earlier in the week as the SEC crackdown stoked nerves.

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Coinbase CEO Says the Crypto Exchange Has Been Always Transparent With US SEC

Coinbase Global’s CEO Brian Armstrong said on Wednesday that the crypto exchange has a long history of being transparent with the US Securities and Exchange Commission.

Armstrong was speaking in an interview with CNBC, a day after the company was sued by the US securities regulator on allegations it failed to register as an exchange.

“The SEC allowed us to become a public company … so, its not great to have a regulator come back and say, actually, we changed our mind,” Armstrong said.

The Securities and Exchange Commission (SEC) alleged Coinbase traded at least 13 crypto assets that are securities that should have been registered, including tokens such as Solana, Cardano and Polygon.

Coinbase shares rebounded on Wednesday to rise nearly 1 percent to $52.03 (nearly Rs. 4,000).

The stock has declined about 20 percent since the SEC sued Coinbase and rival Binance alleging securities law violations, wiping roughly $3 billion (nearly Rs. 24,800 crore) from Coinbase’s market value.

Short sellers have raked in roughly $463 million (nearly. Rs. 3,800 crore) in paper profits betting against Coinbase over the past two sessions, according to data from analytics firm Ortex.

Meanwhile, the US Securities and Exchange Commission have accused the company of operating illegally because it failed to register as an exchange. The lawsuit is the SEC’s second in two days against a major crypto exchange, following its case against Binance, the world’s largest cryptocurrency exchange, and founder Changpeng Zhao.

Crypto companies say the SEC rules are unclear, and that the agency is overreaching by trying to regulate them. On the other hand, ten US states led by California also on Tuesday accused Coinbase of securities law violations concerning its staking rewards program.

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Coinbase Clarifies to US SEC That It Does Not List Securities and Has Not Broken Any Securities Laws

Coinbase Global has reiterated its view to the US Securities and Exchange Commission that it has not broken any securities laws in its formal response to a legal threat received from the regulator, the firm said on Thursday.

Coinbase CEO Brian Armstrong and Chief Legal Officer Paul Grewal said the crypto exchange would like to list securities in the future but would not feel comfortable given the regulatory uncertainty, in a video response to the SEC made public on Thursday.

“Coinbase does not list securities,” Grewal said.

Last month, Coinbase said the SEC had sent a Wells notice — a formal declaration the regulator’s staff intends to recommend an enforcement action.

The incident is one of the latest signs of escalating tensions between the crypto sector and the SEC, which has taken the position that many digital assets are securities and are operating illegally outside of its oversight. The SEC has increasingly sought to tackle what it considers a lack of compliance among crypto firm intermediaries.

“No law or regulation authorizes the SEC to charge Coinbase for the alleged violations in the Wells notice,” Grewal said, noting what he perceives as a change in view by SEC Chair Gary Gensler. “We are on the brink of a fight that doesn’t need to happen, and frankly shouldn’t happen.”

Earlier this week, Coinbase appealed to a federal court to force the SEC to say whether it will create new rules for digital assets. Coinbase last year filed a petition for such a rulemaking.

Coinbase’s deputy general counsel, Katherine Minarik, said in an interview the company will focus on growing outside the US as needed.

“We are going to leave no stone unturned to push for regulatory clarity here,” Minarik said.

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Coinbase Sues SEC for Response on Months-Old Petition Seeking Clarity on Regulation of Crypto Sector

Coinbase, one of the world’s largest crypto exchanges, has sued the US Securities and Exchange Commission (SEC) to clarify rules surrounding the growth of crypto businesses in the US. The crypto exchange has asked a US court to compel the SEC to provide detailed information to allow crypto companies to plan and develop their operations. This move comes months after Coinbase asked the SEC for clarity on crypto rules after the regulator opened investigations into the business activities of the crypto exchange.

In July 2022, Coinbase in July 2022 filed a petition asking the SEC if it would use its official rulemaking process to provide guidance to crypto players. This legal action is a follow-up to Coinbase’s petition to the US SEC seeking clarity.

“Coinbase filed a narrow action in federal court to compel the SEC to respond yes or no to our July 2022 petition asking the SEC to use its formal rulemaking process to provide guidance for the crypto industry. The Administrative Procedure Act (the APA) requires the SEC to respond to Coinbase’s rulemaking petition ‘within a reasonable time’,” Coinbase wrote in a blog post.

The exchange says that over the last nine months, over 1,700 entities have submitted comments to Coinbase’s petition. If the SEC responds with a no to Coinbase’s petition, then the crypto exchange would have an option to challenge that decision in court and pitch the need for clear crypto guidelines in the US.

“It’s important for the SEC and any other agency petitioned for rulemaking to respond to the petition once the agency has made up its mind, especially if the answer is no – otherwise the public can never exercise its right to ask a court if the agency’s decision was proper. From the SEC’s public statements and enforcement activity in the crypto industry, it seems like the SEC has already made up its mind to deny our petition. But they haven’t told the public yet. So, the action Coinbase filed today simply asks the court to ask the SEC to share its decision,” the blog added.

In March this year, the SEC threatened to sue Coinbase Global over some of the crypto exchange’s spot market as well as its Earn, Prime and Wallet products. Coinbase’s step to get the SEC to make its decision on its petition is being seen as a reaction to the SEC’s threat to probe the crypto firm.

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Binance’s Stablecoin Company Paxos in Discussions With US SEC Over Security Token

The firm behind Binance’s stablecoin, Paxos Trust Company, is in discussions with the U.S. Securities and Exchange Commission after the regulator told the company it should have registered the token as a security, according to an internal email from Paxos’ chief executive officer.

“We are engaged in constructive discussions with the SEC, and we look forward to continuing that dialogue in private,” said Paxos CEO Charles Cascarilla in an email sent on Saturday to Paxos employees which was seen by Reuters.

He added that if necessary, Paxos would defend its position that Binance USD is not a security through litigation.

An SEC spokesperson declined to comment. Paxos declined to comment beyond the email.

The New York Department of Financial Services (NYDFS) said in a consumer alert on February 13 that it had ordered Paxos to stop minting Binance USD, the third biggest stablecoin with about $16 billion (nearly Rs. 1,32,570 crore) in circulation.

In turn, Paxos said it would stop issuing new Binance USD from February 21, but would continue to support and redeem the tokens until at least February 2024.

Cascarilla said the company’s decision to end its relationship with Binance was separate from the NYDFS directive and the communication it has had with the SEC over Binance USD.

“The market has evolved and the Binance relationship no longer aligns with our current strategic priorities,” he said.

Binance did not immediately respond to a request for comment, but has said it would continue to support Binance USD for the foreseeable future.

Cascarilla said that Paxos was still working with the SEC towards the publication of its application to obtain a clearing agency license, and with the US Office of the Comptroller of the Currency (OCC) to get final approval for its national trust bank charter.

The OCC declined to comment.

Stablecoins, digital tokens typically backed by traditional assets designed to hold a steady value, have emerged as one of the key cogs in the crypto economy. They are used for trading between volatile tokens like bitcoin and, in some emerging economies, as a means to protect savings against inflation.

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Kim Kardashian Agrees to Pay $1.26 Million to US SEC for Unlawful Crypto Promotion on Social Media

Kim Kardashian has agreed to pay $1.26 million (nearly Rs. 10 crore) to settle Securities and Exchange Commission charges that she promoted a cryptocurrency on Instagram without disclosing that she’d been paid $250,000 (nearly Rs. 2 crore) to do so.

The SEC said Monday that the reality TV star and entrepreneur has agreed to cooperate with its ongoing investigation.

The SEC said Kardashian failed to disclose that she was paid to publish a post on her Instagram account about EMAX tokens, a crypto asset security being offered by EthereumMax.

Kardashian’s Instagram post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase EMAX tokens.

“The federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source, and amount of compensation they received in exchange for the promotion,” Gurbir Grewal, director of the SEC’s division of enforcement, said in a prepared statement.

Kardashian has agreed to not promote any crypto asset securities for three years.

“Kim Kardashian is pleased to have resolved this matter with the SEC. Kardashian fully cooperated with the SEC from the very beginning and she remains willing to do whatever she can to assist the SEC in this matter. She wanted to get this matter behind her to avoid a protracted dispute. The agreement she reached with the SEC allows her to do that so that she can move forward with her many different business pursuits,” a lawyer for Kardashian said in an email.

While Kardashian is well known for reality TV, currently appearing on The Kardashians on Hulu, she is also a successful businesswoman. Her brands include SKIMS, which has shapewear, loungewear and other products, and a skincare line called SKKN.

Cryptocurrency has attracted increasing attention from Congress. A bipartisan proposal last month would hand the regulatory authority over Bitcoin and Ether, two popular cryptocurrencies, to the Commodities Futures Trading Commission after wild swings in crypto valuations, dozens of scams and hundreds of billions of dollars gained and lost.

Kardashian is not the first celebrity to attract the attention of regulators for their involvement in cryptocurrency. In 2018, the agency settled charges against professional boxer Floyd Mayweather Jr and music producer DJ Khaled for failing to disclose payments they received for promoting investments in digital currency.

This year, crypto investors have seen prices plunge and companies crater with fortunes and jobs disappearing overnight, and some firms have been accused by federal regulators of running an illegal securities exchange.

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Tesla Received Second Subpoena From US SEC Over Elon Musk’s 2018 Go-Private Tweets

Tesla has received a second subpoena from the US Securities and Exchange Commission over its Chief Executive Elon Musk’s tweets in 2018 about taking the company private, the electric automaker disclosed in a regulatory filing on Monday. The company said it received the subpoena on June 13 and will cooperate with the government authorities. The regulator did not immediately respond to a Reuters request for comment. In November last year, the regulator had subpoenaed Tesla related to a settlement that required Musk’s tweets on material information to be vetted.

Musk had in 2018 settled a lawsuit by the regulator over his go-private tweets by agreeing to let the company’s lawyers pre-approve tweets with material information about the company.

In June, Musk appealed a judge’s refusal to end this 2018 agreement with the SEC.

Separately, Tesla said it has converted about 75 percent of its bitcoin holdings into fiat currency and has recorded an impairment charge of $170 million (roughly Rs. 1,200 crores) related to the asset.

As of June 30, the fair market value of its digital assets was worth $222 million (roughly Rs. 1,700 crore), it said in the filing.

Last week, Tesla asked a US court to dismiss a lawsuit claiming the electric car maker violated federal law by laying off hundreds of workers without advance notice.

Tesla in a filing in federal court in Austin, Texas, where the company is based, said the workers who were terminated signed valid agreements to bring employment-related legal disputes in arbitration and to refrain from participating in class-action lawsuits.

Even if the case remained in court, it should be dismissed because the company was merely “right-sizing” by firing poorly performing workers and not engaging in layoffs that require advance notice, Tesla said.

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