John Reed Stark argues that the United States Department of Justice will file — or has already filed under seal — a Binance-related criminal indictment.
"There exist a litany of indicators that U.S. DOJ will file, or has already filed under seal, a Binance-related criminal indictment," the 19-year Securities and Exchange Commission veteran and former SEC Office of Internet Enforcement chief tweeted.
"To me, the CFTC and SEC complaints read more like criminal indictments, replete with allegations of fraud, deception, obstruction of justice and money laundering," Reed added.
Binance under siege from regulators
The SEC sued Binance, the largest crypto exchange by volume, over several violations of the country's securities laws on June 5. The regulator also filed a motion to freeze crypto assets held by Binance.US and owner Changpeng Zhao.
A 76-page Commodities and Futures Trading Commission complaint, meanwhile, claims certain parties at the exchange were aware that some were using the exchange for criminal activities — drawing parallels to collapsed rival FTX — but leaves the door open for the DOJ to charge the exchange on money laundering.
"Neither the CFTC or SEC case intensely focus on money laundering," Reed noted. In his opinion, "that is the prosecutorial space that has been carved out and reserved for a U.S. DOJ criminal prosecution relating to Binance."
"My take is that U.S. DOJ is working with the SEC, CFTC and multiple informants/whistleblowers, and the next axe to fall is the filing, or unsealing of, Binance-related criminal charges," Reed concluded, adding: "Fail not at your peril."
In preparation for its legal defense against regulators in the U.S., Binance.US added four lawyers from Milbank LLP to its legal team — including former co-director of the SEC's Enforcement Division, George Canellos.
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