The post Breaking! Binance Is Planning To Exit The US Crypto Market As Regulatory Scrutiny Heats Up appeared first on Coinpedia Fintech News
The Securities and Exchange Commission (SEC) has been closely scrutinising Binance, one of the world’s largest cryptocurrency exchanges, over concerns related to potential securities violations. The SEC has been investigating Binance’s operations, including its trading and lending platforms, to determine whether they comply with US securities laws. Additionally, the SEC has been examining whether Binance has been selling unregistered securities to US residents through its exchange platform. As a result, Binance has faced regulatory hurdles and legal action from authorities in several countries, including the United States, Japan, the United Kingdom, and Canada. According to a recent report from Bloomberg, the popular crypto exchange Binance is now planning to exit the US market as SEC’s scrutiny is putting a stop to its expansions and operations.
Binance May Soon Exit The US Market
Binance’s USD-pegged stablecoin, the Binance USD (BUSD), has recently come under scrutiny from the US Securities and Exchange Commission (SEC). The SEC investigates whether BUSD is a security and whether Binance has violated securities laws by offering it on its platform. In response to the SEC’s investigation, Binance has stated that it is committed to complying with all applicable laws and regulations. The company has also emphasised its efforts to ensure the transparency and stability of BUSD, including regular audits of its reserves.
However, the SEC shows no sign of cooperation with Binance and forces Binance to exit the US market as soon as possible to continue expanding its offshore crypto business. A source with knowledge of the matter has revealed that Binance is considering the possibility of scaling back its operations, as the company’s relationships with a critical banking partner and stablecoin issuer have encountered problems in the face of heightened regulatory scrutiny. The Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), Justice Department, and Internal Revenue Service (IRS) have all launched investigations into Binance.
Crypto Market In The US Remains In the Dark
As concerns regarding BUSD are heating up, it lost over $2.5 billion in market cap. Changpeng Zhao, the CEO and co-founder of the world’s largest cryptocurrency exchange in terms of trading volume stated on Friday that funds have shifted from BUSD to Tether. Zhao also emphasised that Binance USD is not issued by Binance.
Additionally, amid all these FUD situations, bank records and internal company communications reveal that Binance had undisclosed access to a bank account that supposedly belonged to its independent US partner. The documents also indicate that significant amounts of money were transferred from the account to a trading firm managed by Binance’s CEO, Changpeng Zhao.
In the first quarter of 2021, records reviewed by Reuters indicate that more than $400 million was transferred from Binance.US’s account at Silvergate Bank, based in California, to a trading firm called Merit Peak Ltd. The Binance.US account was registered under the name of BAM Trading, the operating company of the US exchange. Internal reports suggest that the transfers to Merit Peak began in late 2020.
With US regulators closely scrutinising Binance’s operations, the firm is ready to pay fines to “make amends” for any previous regulatory breaches, as it was unaware of any laws during its establishment.
The outcome of the SEC’s investigation into BUSD is yet to be seen, but it highlights the increasing regulatory pressure on the cryptocurrency industry. As the industry continues to grow and mature, regulators are seeking to ensure that stablecoins and other cryptocurrency offerings comply with existing securities laws and regulations.