John Reed Stark, Former Chief at the SEC Office of Internet Enforcement, recently hinted that the U.S. Department of Justice [DOJ] might have already filed a criminal indictment against Binance under seal. If not, he argued, the agency will do so going forward. According to Reed, the CFTC and SEC complaints “read more like criminal indictments, replete with allegations of fraud, deception, obstruction of justice and money laundering.” Specifically, he tweeted,
“Having worked in the US SEC Enforcement Division for almost 20 years and managed many US SEC-DOJ joint prosecutions, IMHO, there exist a litany of indicators that US DOJ will file, or has already filed under seal, a Binance-related criminal indictment.”
DOJ’s filing or unsealing will be the “next axe to fall”: Former SEC official
For context, the SEC sued Binance and its CEO Changpeng Zhao on the grounds of securities law violations on June 5. The exchange has also been blamed for mishandling customer funds and lying to both regulators and investors regarding its operations. Parallelly, the agency also filed a motion to freeze crypto assets held by the exchange’s US arm, Binance.US.
Before the SEC episode, Binance and its executive were also being sued by the U.S. Commodity Futures Trading Commission [CFTC] for alleged regulations violations. The agency blamed the exchange for breaking trading and derivatives rules. The CFTC complaint also charged Samuel Lim, Binance’s former chief compliance officer, with aiding and abetting Binance’s violations. Reed pointed out,
“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 US DOJ criminal prosecution relating to Binance.“
According to the former SEC official, the U.S. DOJ is working with the SEC, CFTC, and multiple informants/whistleblowers. He asserted that the “next axe to fall” is the filing, or unsealing of, Binance-related criminal charges.