Former SEC official hints at criminal probe in sealed Binance case

The SEC has requested permission to submit undisclosed documents under seal in its civil lawsuit against Binance, Binance.US, and CEO Changpeng Zhao.

The U.S. Securities and Exchange Commission (SEC) submitted a request to the U.S. District Court for the District of Columbia, asking for permission to file certain documents under seal in its civil case against Binance, its U.S. subsidiary Binance.US, and the CEO, Changpeng Zhao (CZ). The content of the SEC’s motion itself is sealed, sparking speculation around the possibility of sensitive or potentially incriminating details.

Former SEC official John Reed Stark weighed in on the issue, suggesting that the SEC’s sealed motion could be linked to an ongoing criminal investigation by the U.S. Department of Justice.

What’s Up With The Secret U.S. SEC Motion Relating to Binance?

In the U.S. SEC/Binance litigation, the U.S. SEC has filed a sealed motion for leave to file documents under seal, according to an SEC court filing late yesterday. Filing a court document “under seal” allows… pic.twitter.com/cmx6gdh2so

— John Reed Stark (@JohnReedStark) August 29, 2023

The DOJ is reportedly scrutinizing Binance, the biggest cryptocurrency exchange, for alleged issues like money laundering and possible violations tied to Russian entities. Stark believes that Binance probably won’t contest the SEC’s motion to keep these documents under wraps, as it might risk revealing damaging evidence.

This move comes on the heels of Binance’s altered approach toward its Russian clientele. The crypto exchange recently made policy changes, restricting Russian residents to transact solely in rubles and omitting certain Russian financial institutions from their payment options list.

Meanwhile, a company spokesperson indicated that Binance is exploring all avenues regarding its activities in Russia, even pondering a full exit from the market.

The SEC and Binance already have a complicated legal history. Back in June, the SEC sued Binance, its U.S. arm, and CZ for allegedly offering unregistered securities to U.S. citizens and failing to acquire the necessary licenses.

In a parallel development, the Commodity Futures Trading Commission (CFTC) filed a separate lawsuit against the same entities. Both Binance and CZ moved to dismiss the CFTC case in July, but both cases remain open as of now.