News - How are the SEC's lawsuits different?

By Mike Hesp

How are the SEC's lawsuits different?

Algorand (ALGO)

The SEC's lawsuits against Binance and Coinbase have shocked the market. Despite some similarities, the differences are stark.

The Securities and Exchange Commission (SEC) is targeting two of the world's leading crypto exchanges with its lawsuits against Binance and Coinbase. Both have violated applicable US laws, according to the financial regulator.

The complaints are each more than 100 pages long and have many similarities in parts such as, unregistered securities trading, unlicensed services as exchanges, brokers and clearing houses and investor endangerment. These are just some of the similarities. In fact, however, the allegations could not be more different.

Because while the charges against Coinbase are serious, the charges against Binance seem much more serious. It reads like an action thriller, while Coinbase is more like a non-fiction book. In addition to violating securities laws, the world's largest crypto exchange also faces allegations of wash trading and misuse of their customers' assets. SEC chief Gary Gensler speaks of a "web of deceit."

SEC also drags "CZ" to court

Another difference was made by Coinbase CEO Brian Armstrong in a interview with Wall Street Journal: " I and other members of the executive level were accused by name in the indictment."

Binance is a different story. In addition to the companies, the SEC also named founder and CEO Changpeng "CZ" Zhao as a defendant. He allegedly not only knew about his platform's lawbreaking, but actively ordered it.

However, this is not the only lawsuit facing Binance's CEO. In March, the CFTC (the Commodity Futures Trading Commission) filed a lawsuit against Binance, alleging, among other things, inadequate measures to combat money laundering and terrorist financing. Even there, it's not just about the crypto exchange itself, but Zhao's name comes up, along with former compliance chief Samuel Lim.

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