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A recent tweet by a former SEC official revealed that Binance is preparing to face potential legal consequences. The crypto exchange and its CEO, Changpeng Zhao, have bolstered its legal defense by adding former SEC and DOJ prosecutor George Canellos to the team.
Former SEC official Discloses Binance Preparations
In a tweet on June 12, former SEC official John Reed Stark said, “Binance is preparing for a criminal prosecution and continuing to hire the best defense attorneys in the world.”
Canellos is a former chief of the Major Crimes Unit in the U.S. Attorney’s Office for the Southern District of New York and a former head of the SEC’s New York office. According to Stark, Binance and its CEO, Changpeng Zhao, have enlisted the expertise of George Canellos for their legal team.
Stark believes this is a significant move because Canellos will bring a unique perspective and experience, having worked as a prosecutor for both the SEC and the Department of Justice.
However, he doubts Binance could get out of this “current perilous legal quagmire” even if they hire Ironman, Captain America, or the Hulk. But while responding to Stark’s post, a crypto enthusiast reminded him that Binance is a top firm and not a small crypto scam being sued.
According to the user, “Binance is a whole different beast, my friend, with a very large war chest. The SEC is stretched thin on resources and funding, and Gensler is getting removed in the next SEC reform bill.
“This isn’t some little crypto scam coin getting sued. It’s the biggest behemoth in all of Crypto.”
Binance Argue Against SEC’s Restraining Order Motion
Notably, on June 5, the Securities and Exchange Commission (SEC) filed 13 charges against Binance entities and its founder Changpeng Zhaoon (popularly known as CZ).
The SEC claimed that Binance was involved in the operation of unregistered exchanges, broker-dealers, clearing agencies, and other charges.
In addition, the US SEC also alleges that the CEO had access to customer funds in the Binance.US platform, and he orchestrated the movement of $12 Billion through Merit Peak, a privately-controlled entity.
On June 6, a day after the SEC had filed a case against Binance, the SEC further intensified its effort by filling an emergency motion for a temporary restraining order against Binance.
The motion sought to freeze the assets held on Binance.US until the exchange could demonstrate that the funds were beyond the reach of CZ or any other Binance executive.
However, Binance responded with an opposing motion saying that “the requested relief would primarily harm BAM’s customers, effectively put BAM out of business, and prevent BAM from defending itself in this litigation.”
According to the cryptocurrency exchange, if it cannot make payments to its employees and professionals as part of its regular business operations, its activities would come to a halt.
Furthermore, it expressed concerns that it would be unable to financially support its defense in response to the legal action taken against it.
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