Binance, one of the world’s largest cryptocurrency exchanges, and its CEO have agreed to a $4 billion resolution with the US Department of Justice (DoJ). The settlement, linked to anti-money laundering charges, has sent ripples through the crypto market, affecting various digital currencies.
Stuart Alderoty take on Binance’s settlement
Stuart Alderoty, Ripple’s Chief Legal Officer, commented on the Binance settlement, noting its importance in bringing the crypto industry into compliance with crucial anti-money laundering laws. Alderoty pointed out that the charges against Binance did not involve securities law violations nor imply that Binance supported securities trading. He remarked that such processes were not uncommon, as many big banks have undergone similar situations.
The Ripple CLO also observed the absence of the Securities and Exchange Commission (SEC) from the Binance resolution, a notable exclusion given the Treasury and Commodity Futures Trading Commission’s (CFTC) participation. Alderoty criticized the SEC’s approach under Gary Gensler’s leadership, suggesting the agency has become isolated globally and within the US government.
Alderoty further commented on the SEC’s timing of announcing a lawsuit against Kraken, coinciding with the DoJ’s press conference on Binance. He criticized the SEC’s actions for appearing reactive and uncoordinated, highlighting the agency’s use of the term “crypto asset securities,” which he argued lacks legal standing.
SEC sues Kraken, Ripple CLO reacts
Simultaneously, the SEC has filed a lawsuit against Kraken, another major player in the crypto industry. The charges include operating an unregistered exchange and allegations of commingling customer cryptocurrencies and fiat currencies, which differentiates it from cases like Coinbase. Following the FTX trial, this lawsuit may raise concerns regarding the potential penalties Kraken could face, especially around the mishandling of customer assets.
John E. Deaton, an attorney with amicus curiae standing in the crypto space, reached out to Kraken users, offering them an opportunity to join as amicus curiae in the SEC’s case against Kraken. This move suggests a growing interest in allowing crypto users a voice in legal matters that could significantly impact the industry.
The recent legal developments involving Binance and Kraken signify a turning point for cryptocurrency regulation and compliance. The hefty $4 billion settlement with Binance and the SEC’s aggressive stance against Kraken suggest a tightening regulatory environment for crypto exchanges. These actions could lead to more robust compliance measures across the industry, potentially increasing investor confidence in the long term.
