Coinspeaker
SEC Condemns Binance.US, Says Exchange Engaged in ‘Wash Trading’ Activities
The US Securities and Exchange Commission (SEC) has recently slammed Binance.US, the American arm of the global crypto exchange Binance, with yet another accusation. According to a Wall Street Journal report, the SEC claims that Binance.US was often involved in wash trading. That is, it fraudulently amplified its trading volumes, sometimes trading with itself, to appear very active in the markets.
Although the exchange has denied any such activities, albeit severally, the allegations may have influenced the ongoing SEC lawsuit. More so, the US Department of Justice (DoJ) is also actively investigating the exchange. So, as a result of the regulatory scrutiny, there have been reports of multiple resignations from the exchange’s top executives. That is not to mention the significant drop in the platform’s market share.
To put the above statement into perspective, Binance.US currently holds less than 1% of the market share. Hence, creating a situation that has forced customers to retrieve their funds from the platform.
Also, there is the recent wave of layoffs that hit the company following the SEC lawsuit and the DoJ probe. Earlier reports suggest that the parent exchange, Binance, has laid off 1,000 employees since the federal crackdown in the U.S. However, CNBC claims that that is only part of more layoffs that Binance has planned for the year. Citing a source with inside knowledge of the matter, CNBC says Binance intends to cut between 1,500 to 3,000 jobs within the year.
In his usual manner, Binance CEO Changpeng Zhao downplayed the layoff rumors, claiming that the numbers reported were inflated. He maintains that the layoffs have nothing to do with the ongoing scrutiny but rather an attempt to increase talent density. Zhao also noted that the company is still hiring.
Binance Maintains Relevance amid Regulatory Heat
Binance currently faces regulatory heat from both the SEC and CFTC. That is alongside an ongoing Justice Department investigation. Having been slammed with various securities and commodities violations, founder Zhao continues to downplay the concerns.
Interestingly, Zhao appears to be unruffled by the plethora of lawsuits against the exchange. And that may have contributed to the continued relevance of Binance.
Despite regulatory challenges, the parent exchange maintains its dominance in the global market. Though down from the 60% share it had in early 2023, Binance still holds a 52% share of the market as of publication.
SEC Condemns Binance.US, Says Exchange Engaged in ‘Wash Trading’ Activities
