SEC lawsuit claims Binance.US, Changpeng Zhao put customer funds ‘at significant risk’

June 7, 2023 Coin Telegraph

Binance

One of the latest SEC filings in its lawsuit against Binance claims billions of customer funds are at the “mercy” of Binance CEO Changpeng Zhao.

The United States Securities and Exchange Commission (SEC) has filed another document in its lawsuit against Binance.US, claiming investors’ funds are at risk.

In the filing entered on June 5, the regulators claim that the defendants, including Binance CEO Changpeng “CZ” Zhao, BAM Management, BAM Trading and Binance, “have enriched themselves by billions of U.S. dollars while placing investors’ assets at significant risk.”

It goes on to say that the defendants’ made “purposeful efforts” to bypass U.S. regulatory oversight while providing securities-related services to U.S. users.

“[This] puts the safety of billions of dollars of U.S. investor capital at risk and at Binance’s and Zhao’s mercy.”

A report from CNBC claims that the amount cited by the SEC goes as high as $2.2 billion.

The filing offers an example of billions of U.S. dollars of customer funds from both Binance and Binance.US being “commingled” in an account operated by a “Zhao controlled entity,” which it identified as Merit Peak Limited.

It said funds were then transferred to a third party “apparently in connection” with the purchase and sale of crypto assets.

According to regulators, the arrangement has given and continues to provide Zhao “free reign” over billions in deposited assets on the Binance.US platform, “with no oversight or controls to ensure that the assets are properly secured.”

At the time of writing, Binance.US has said that user funds on the platform “remain safe” amid the SEC’s attempts to freeze assets.

On June 6, the U.S. regulators filed a motion for a restraining order against Binance due to mishandling user funds and operating with unregistered securities. The freezing of assets was one of the requested actions included in the motion.

In its lawsuits against Binance and Coinbase, the regulator labeled at least 67 different cryptocurrencies as securities. This affects more than $100 billion worth of tokens in the market.

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White House questions impact of AI surveillance on workers

May 24, 2023 Coin Telegraph

Officials in Washington D.C. said they will hold a listening session to understand the experiences of workers and the usage of AI surveillance in the workplace.

Officials in the United States are making efforts to keep tabs on the development of artificial intelligence (AI), as new plans surface to examine workers’ experience with AI surveillance.

According to a Reuters report, officials at the White House said on May 23 that they would be asking workers how their employers use AI for monitoring purposes. This comes as federal investments are being allocated toward the development of the technology.

Regulators in the U.S. are planning to hold a listening session to hear out such experiences with AI for workplace surveillance, monitoring and evaluation. Also on the call will be gig work experts, researchers, and policymakers

The forthcoming listening session comes only a few weeks after U.S. Vice President Kamala Harris invited executives from major tech companies to the White House to discuss the dangers of AI.

In attendance were nine of the top advisers to the Biden administration in science, national security, policy and economics, along with the CEOs of OpenAI, Microsoft and Meta CEO Mark Zuckerberg, among others.

Prior to the meeting, U.S. President Joe Biden addressed tech companies imploring them to address the risks of the technology.

On May 4, U.S. officials released standards for key and emerging technologies, which identified eight sectors within the tech industry that could have a significant impact on the economy in upcoming years.

Most recently, Sam Altman, the CEO of OpenAi which created ChatGPT, testified before Congress in a “historic” session that focused on the potential threats posed by generative AI.

The U.S. is not alone in forming a regulatory stance on emerging technology. Regulators in the United Kingdom recently pledged nearly $125M towards the creation of a ‘safe AI’ task force while the country focuses on AI “readiness.”

Meanwhile, in the European Union, officials are in the process of finalizing legislation that could be one of the world’s first set of legal measures and guidelines regulating generative AI tools. The most recent round of deliberations for the EU AI Act included a ban on facial recognition in public spaces and predictive policing tools.

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Binance looks to the UK for regulation amid US crypto crackdown

May 11, 2023 Coin Telegraph

Binance

Binance seeks regulation in the U.K. amid a U.S. crackdown on cryptocurrencies as its chief strategy officer acknowledges the challenging business environment in the United States.

Crypto exchange Binance has acknowledged that a crackdown on cryptocurrencies has made conducting business in the United States challenging. It is now looking to be regulated in the United Kingdom.

During the Financial Times’ Crypto and Digital Assets Summit, Patrick Hillmann, Binance’s chief strategy officer, said that the past six months have been quite confusing in the United States. He added that the recent actions taken by the U.S. Securities and Exchange Commission (SEC) against rival exchange Coinbase for allegedly violating securities laws are an indication of how “the U.S. right now is in this strange place.“

While Hillmann acknowledged the “very confusing” environment in the U.S., he expressed the company’s commitment to doing “everything we possibly can” to be regulated in the United Kingdom.

This is a change of tone from his earlier statement that the current crackdown on crypto had made it difficult to do business in the United States. Binance has previously clashed with U.K. regulators over its failure to provide essential information about its business activity, which led regulators to suggest the exchange was unregulatable.

In 2021, the Financial Conduct Authority ordered the company to stop all regulated activities in Britain. Other groups have claimed that U.K. officials have been overly wary of fintech and crypto companies.

A representative from Binance stated that the company adheres to regulations concerning money laundering and terrorism financing in the United Kingdom. They explained that Binance has a compliance program, which utilizes Anti-Money Laundering, global sanctions principles, and tools employed by financial institutions to detect and address any suspicious activity.

According to Binance, the crypto exchange can secure approvals and registration through the compliance program in various jurisdictions across the globe, including New Zealand, Dubai, France, Italy and Spain.

Binance has been the target of U.S. regulators clamping down on perceived illicit activity this year. In March, the Commodity Futures Trading Commission (CFTC) brought a lawsuit against Binance, alleging it had been operating illegally in the country and had broken the law by extensively soliciting U.S. customers. At the time, Binance called the CFTC complaint “unexpected and disappointing.”

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Defending against SEC to cost Ripple $200M, CEO Brad Garlinghouse says

May 8, 2023 Coin Telegraph

Defending against SEC to cost Ripple 0M, CEO Brad Garlinghouse says

Coin Telegraph

Ripple’s CEO reveals $200 million spent defending the SEC lawsuit, and laments about U.S. crypto regulation and a politics-first policy, advising entrepreneurs to avoid the United States.

Ripple has spent $200 million defending the case brought against it by the United States Securities Exchange Commission (SEC), according to CEO Brad Garlinghouse.

Garlinghouse dropped the figure during a fireside chat at the Dubai Fintech Summit on May 8. He stated that the U.S. is stuck compared with the regulatory progress of the United Arab Emirates virtual asset regulatory authority and the recent Markets in Crypto-Assets (MICA) bill in the European Union. He went on to share that by the time the case is decided, Ripple will have spent $200 million defending itself against a lawsuit which, from its very beginning, doesn’t make a lot of sense.

In a message to SEC chair Gary Gensler, Garlinghouse expressed regret about the U.S. falling behind significantly as Ripple expands to the United Arab Emirates. According to him, the tough thing about the situation is having a country that has put politics ahead of policy. Garlinghouse said one of the first pieces of advice he gives entrepreneurs when they ask him about getting something started is,” If I were you, I would not start in the United States.” He believes many U.S.-based companies and U.S. public companies would agree.

This is a developing story, and further information will be added as it becomes available.

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RFK Jr. elaborates position on CBDC, crypto: ‘It isn’t just criminals who want privacy’

May 5, 2023 Coin Telegraph

Bitcoin mining

The U.S. presidential candidate has added anti-CBDC to his anti-establishment, anti-vaccination repertoire and has gained double-digit support among Democrats.

Robert F. Kennedy Jr., who is challenging United States President Joe Biden for the Democratic nomination in the 2024 presidential election, has taken to Twitter again to share more of his thoughts on cryptocurrency.

Kennedy criticized Biden on May 2 for calling the U.S. banking system “safe and sound” the previous day. “Today, bank stocks are crashing. The American people deserve more than glib assurances and perception management,” he tweeted.

On May 3, Kennedy condemned the Biden administration’s proposed tax on crypto mining. An environmental lawyer, Kennedy called the proposed 30% tax on energy used by crypto miners “a bad idea.” He said mining’s energy use was “a concern (though somewhat overstated),” and continued:

“The environmental argument is a selective pretext to suppress anything that threatens elite power structures. Bitcoin, for example.”

Jumping to “control” of cryptocurrency, Kennedy found more anti-establishment fodder. “It isn’t just criminals who want privacy,” he said. “Governments harass their enemies and crush dissent by controlling bank accounts and payment platforms.”

Kennedy developed the theme of financial control further the following day with a look back at the Canadian truckers’ anti-vaccination protests in Ottawa in 2022. The Canadian government locked the bank accounts of people supporting the protesters. Kennedy said:

“It’s not outlandish to imagine that even here in America, your bank account could one day be frozen because of your politics, or comments you’ve made on social media.”

After all, he said, GoFundMe blocked U.S. accounts supporting the Canadian truckers and redirected donations to them. Meanwhile, Paypal imposed fines on users for spreading “what they deemed to be misinformation.” Both of those decisions were successfully challenged in court, but Kennedy saw the hand of big government behind them anyway. “Often those private companies are acting out of fear of Congress or regulators, or directly at their bidding,” he claimed.

Please learn the difference, RFK Jr. ✌️https://t.co/Y5EHShNPFA
— Wicked (@w_s_bitcoin) May 3, 2023

“That is why I oppose CBDCs [central bank digital currencies], which will vastly magnify the government’s power to suffocate dissent by cutting off access to funds with a keystroke,” Kennedy concluded.

Kennedy first voiced his opposition to CBDCs in a somewhat confused tweet relating to the FedNow instant payment system.

I am voting for whomever is procrypto

if anyone is offended by this it means you hate liberty, entrepreneurism, small businesses and the underdogs
— Wendy O (@CryptoWendyO) May 3, 2023

According to CNN on April 29, Kennedy has 19% support among Democrats. He shares his distrust of CBDCs with several Republican politicians, such as Florida Governor Ron DeSantis, who is seen as a possible challenger to candidate Donald Trump for the Republican presidential nomination.

In addition to Kennedy, writer Marianne Williamson has declared her intention to challenge Biden for the U.S. presidency. She implied dismay at the Canadian government’s blocking of bank accounts and crypto wallets in a tweet at the time and holds that “our government has become a handmaiden to a new corporate order,” but does not mention cryptocurrency on her campaign website.

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