Crypto exchange Binance, which has been in regulators’ crosshairs for months in numerous countries, may now face new fraud charges in the United States.
That’s according to a report by Reed Albergotti in the online journal Semafor. The story quickly gained traction with a tweet from crypto commentator Walter Bloomberg on Wednesday afternoon, which soon racked up more than 141,000 views. In a separate tweet, Bloomberg noted that US prosecutors fear that pending charges could cause a run on the exchange.
Binance in the Prosecutors’ Spotlights
Some may have seen the new charges coming anyway, given the fear, uncertainty, and doubt (FUD) swirling around Binance and CZ.
A US court slapped Binance CEO Chanpeng Zhao (“CZ”) with a summons in June. The counts involved offerings of unregistered investment services. Not to mention lying to investors. So the rumored fraud charges are not a surprise to everyone.
Still, by any measure, there has been an awful lot of bad news for Binance in the space of one week. On July 28, a Wall Street Journal report disclosed that Germany’s financial watchdog, BaFin, had its own share of concerns about CZ and Binance.
Reportedly as a result of BaFin’s unwillingness to approve Binance’s application for a license, Binance pulled its application last week.
Here, again, developments were merely the confirmation of rumors that had swirled. Jonas Jiinger, Binance’s German head of operations, had told a German newspaper that BaFin’s threshold was “rightly high.”
He might have been referring to the 480 days, on average, that it takes to gain a license in Germany.
And, in June, Belgium’s Financial Services and Markets Authority ordered Binance to stop offering crypto services in Belgium immediately. The exchange had violated local laws that prohibit players outside the European Economic Area from marketing crypto services in Belgium without a license. The regulators had well-founded concerns over money laundering.
Now, US lawmakers have gotten on board with the international backlash against Binance. And where things go from here is anybody’s guess.
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