Binance and Coinbase Show Knives Out for Crypto
Expect to keep hearing the whooshing sound of money being yanked from a once-hot market.
Changpeng Zhao, chief executive officer of Binance.
Photographer: Anthony Kwan/BloombergBinance and other cryptocurrency firms were once expected to emerge from the rubble of the FTX collapse as the survivors of a market that would inevitably rally. Now, US regulators have made it clear that the knives are out for the entire crypto sector, with intent to inflict death by a thousand cuts.
The Securities and Exchange Commission’s 136-page complaint Monday against Binance for allegedly mishandling customer funds, improperly functioning as an unregistered exchange and breaking securities rules makes for brutal reading on its own — largely thanks to internal chats that would make a pre-2008 Libor trader blush. “We are operating a fking unlicensed securities exchange in the USA bro,” Binance’s compliance officer apparently told a colleague in 2018. On top of flouting rules by letting Americans improperly open accounts and trade, the SEC alleges wash trading artificially inflated Binance volumes. (Binance says it takes the allegations “seriously” but will “vigorously defend” its platform.)