U.S. SEC Charges Binance & Coinbase

June 6, 2023 | 6 Comments

[Updated] The United States Securities and Exchange Commission [SEC] has filed charges against two of the most prominent crypto companies in the world, with today’s charges against Coinbase following after the charges it filed against Binance yesterday.


A statement from the SEC about the Coinbase matter said, “The Securities and Exchange Commission today charged Coinbase, Inc. with operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency. The SEC also charged Coinbase for failing to register the offer and sale of its crypto asset staking-as-a-service program.

“According to the SEC’s complaint, since at least 2019, Coinbase has made billions of dollars unlawfully facilitating the buying and selling of crypto asset securities. The SEC alleges that Coinbase intertwines the traditional services of an exchange, broker, and clearing agency without having registered any of those functions with the Commission as required by law.

“The SEC’s complaint also alleges that Coinbase’s holding company, Coinbase Global Inc. [CGI], is a control person of Coinbase and is thus also liable for certain of Coinbase’s violations.

“The SEC’s complaint, filed in U.S. District Court for the Southern District of New York, alleges that Coinbase and CGI violated certain registration provisions of the Securities Exchange Act of 1934 and that Coinbase violated the securities offering registration provisions of the Securities Act of 1933. The complaint seeks injunctive relief, disgorgement of ill-gotten gains plus interest, penalties, and other equitable relief.”

In response, Paul Grewal, Coinbase’s general counsel, said, “The SEC’s reliance on an enforcement-only approach in the absence of clear rules for the digital asset industry is hurting America’s economic competitiveness. The solution is legislation that allows fair rules for the road to be developed transparently and applied equally, not litigation.”


As far as Binance, the SEC said, “The Securities and Exchange Commission today charged Binance Holdings Ltd. which operates the largest crypto asset trading platform in the world, Binance.com; U.S.-based affiliate, BAM Trading Services Inc. which, together with Binance, operates the crypto asset trading platform, Binance.US; and their founder, Changpeng Zhao, with a variety of securities law violations.

“Among other things, the SEC alleges that, while Zhao and Binance publicly claimed that U.S. customers were restricted from transacting on Binance.com, Zhao and Binance in reality subverted their own controls to secretly allow high-value U.S. customers to continue trading on the Binance.com platform. Further, the SEC alleges that, while Zhao and Binance publicly claimed that Binance.US was created as a separate, independent trading platform for U.S. investors, Zhao and Binance secretly controlled the Binance.US platform’s operations behind the scenes.

“The SEC’s complaint, filed in the U.S. District Court for the District of Columbia, alleges that, since at least July 2017, Binance.com and Binance.US, while controlled by Zhao, operated as exchanges, brokers, dealers, and clearing agencies and earned at least $11.6 billion in revenue from, among other things, transaction fees from U.S. customers.”

In response, Binance said, “We intend to defend our platform vigorously. Unfortunately, the SEC’s refusal to productively engage with us is just another example of the Commission’s misguided and conscious refusal to provide much-needed clarity and guidance to the digital asset industry.

“The SEC’s actions undermine America’s role as a global hub for financial innovation and leadership. Digital asset laws remain largely undeveloped in much of the world, and regulation by enforcement is not the best path forward. An effective regulatory framework demands collaborative, transparent, and thoughtful policy engagement.”

Global Companies

The companies are global ones, however back in 2018 Binance considered setting up on the island, and as part of what Coinbase called an “international expansion drive” a company named Coinbase Bermuda Ltd obtained a Class F License under the Digital Asset Business Act from the Bermuda Monetary Authority.

Bermuda has Digital Asset legislation in place, which the official Fintech website said “creates a unique environment that prioritizes regulatory certainty, investor confidence and compliance with international Know Your Customer [KYC] and Anti-Money Laundering [AML] regulations.”

Update 8.42pm: A Government spokesperson said, “The Ministry of Finance is aware of the US developments today regarding Coinbase Inc. and related entities. Unlike other countries in the digital asset business, the digital asset business sector in Bermuda is regulated under the Digital Asset Business Act 2018 [the “Act”].

“Since 2018, the Bermuda Monetary Authority [the “Authority”], working together with the Government, has spent a great deal of time and effort to create and promote a regulatory environment and level of expertise where the digital asset business sector can grow.

“As for all Regulatory Acts, the Act grants the Authority a broad range of powers to investigate complex matters of this kind when needed.”

click here banner technology 7

Read More About

Category: All, Business, technology

Comments (6)

Trackback URL | Comments RSS Feed

  1. question says:

    Burt said it was a ‘historic day’ when Binance signed an MOU with the government promising 40 jobs including 30 for Bermudians, and a $10m investment for training Bermudians in blockchain. Burt said it was ‘a vote of confidence in Bermuda and its leadership’.

    All part of the abject failure of Burt.
    Crypto currencies: fail.
    Casinos: fail.
    Recording studio / Savvy Entertainment: fail.
    TA form debacle: fail
    Grand Atlantic: fail
    Selling rum swizzle in recycled Goslings bottles: fail

  2. Ringmaster says:

    Surely there is some mistake? Crypto was to be Burt’s biggest success story for Bermuda, just remember Arbitrade and their $10 billion in gold. Maybe Warren Buffet’s warning was true, trading crypto is the same as trading dog poo.

    Where is Burt to have a photo op to refute all these bad press reports? More damaging than a few minutes debate in the HoA about Gencom’s deal negotiated by Burt. Where is the push back to show the world Bermuda is not easily duped, or is he hiding, and no word from any other 29 PLP MPs, so they are all culpable in supporting Burt’s idiocy.

  3. Joe Bloggs says:

    “Neither of the companies charged is based in Bermuda, and Bermuda is not named in the documents”

    Well, there’s a bit of good news.

Leave a Reply