The former head of the US Securities and Exchange Commission (SEC)’s online enforcement division has warned that the file recently revealed by the US Department of Justice (DOJ) is the beginning of the end for Binance.
He noted that the SEC has strengthened its legal measures against the largest cryptocurrency trading platform in the world.
Complex settlement and very expensive to implement
These views were shared by former SEC official John Reed Stark. In a lengthy post on the social media platform X (Twitter) on Saturday.
Stark is currently president of cybersecurity firm John Reed Stark Consulting. He founded and led the SEC’s Office of Cyber Enforcement for 11 years. He was also a lawyer at the same regulatory body for 15 years.
The former SEC official spoke about two key developments in Binance’s settlement with the US Department of Justice (DOJ).
First, he explained that there was a wave of files related to Binance that were recently disclosed by the US Department of Justice. Which clearly highlighted the broad and powerful oversight it now has over Binance.
He stressed that the recent files revealed by the US Department of Justice may indicate the end of Binance.
Binance’s new list of compliance obligations sounds like a wish list for a consulting firm — and would cost tens, if not hundreds, of millions of dollars to implement and enforce.
John Reed Stark
Supervision and supervision will be imposed on Binance in the future. It would be like installing body cameras on every member of a global drug trafficking gang. He made the gang bear the cost of a large, experienced and well-qualified team of former and current government agents to monitor the footage 24 hours a day, 7 days a week.
John Reed Stark
My opinion is that, like a drug cartel, a secretive and opaque financial company like Binance cannot suddenly transform into a traditional, law-abiding, open, transparent, obedient, submissive and friendly financial company with the government. Surviving SEC scrutiny could be difficult for Binance’s tired architecture. But facing DOJ/FinCEN scrutiny – well, that seems almost impossible.
John Reed Stark
Only a matter of time before the settlement deal with Binance collapses
For me, it is only a matter of time before the settlement deal with Binance collapses. Which leads to additional charges against Binance, and additional charges against CZ Zhao (its former CEO). And new charges against anyone else (partner, client, joint venture, collaborator, etc.) who was subtly involved with the Binance criminal enterprise.
John Reed Stark
He also stressed that the absolute truth is that neither Binance nor any other large crypto company (or any financial company in the world at all). It was a party to a recognition agreement with DOJ/FinCEN that requires robust, robust, and comprehensive government oversight. Such as the one Binance has agreed to submit to (and bears the costs of).
The second development Stark identified is that the SEC has filed a supplemental lawsuit against Binance. Which is believed to have significantly strengthened the authority’s case against the cryptocurrency trading platform.
The former SEC online enforcement chief described: “In their pending lawsuit against Binance, the SEC has begun incorporating facts from the plea agreement with the DOJ into the pending lawsuit against Binance and Changpeng Zhao.
Breaking News: A Binance Double Whammy. 1) Newly Unsealed US DOJ Filings Could Mean the End of Binance; and 2) SEC Files Supplemental Pleading Against Binance, Strengthening the SEC Binance Lawsuit Exponentially
— John Reed Stark (@JohnReedStark) December 9, 2023
There’s been a flurry of newly released Binance-related filings… pic.twitter.com/igN2I9Y7cP
