Binance Caught in the Middle of Regulatory Scrutiny by SEC

Binance (BNB-USD), while enjoying its status as the world’s largest cryptocurrency exchange, it has to contend with the compromise that comes with this status. A target is painted on its back by regulators around the world. One of the most determined agencies to be a guardian in the digital assets space is none other than the Securities and Exchange Commission (SEC). The SEC has publicly targeted smaller fish, but behind the scenes it looks like it has been chasing Binance for some time now.

A report of Reuters suggests the SEC has picked up the smell of Binance for most of the past couple of years. According to the outlet, the agency has been requesting internal documents from Binance since at least the end of 2020.

The specific request that is coming to the fore this week is for more insights into the company’s anti-money laundering controls. Also look for internal communications from Binance CEO Changpeng Zhao, a leading figure for the cryptocurrency industry in general. In addition, 12 communications were requested from other Binance executives.

It is worth noting that Binance and Binance.US are separate entities, with the latter serving only American customers. Since this request by the SEC has been made, Binance has appointed Brian Shroder as CEO of Binance.US.

This news makes sense, given that by this time the SEC’s interest in cryptocurrencies had just gone public. The request dates back to December 2020, the same month in which he opened a lawsuit against Ripple (XRP-USD). It also shows the depth of their interest right now; While the Ripple lawsuit deals with asset classification, it is now shown that the SEC was also sympathetic to the illicit nature of the blockchain more than two years ago.

Binance News shows that the SEC has been on the trail of Crypto

Binance news shows that the SEC has been keeping cryptocurrencies in check for far longer than investors might have expected. After all, other industries are just getting trendy for space. For example, it took the FBI until February of this year to create a crypto task force. Now that it’s firmly rooted in space, the SEC is really starting to consider exchanges.

Last month, a staff member of pro-crypto senator Cynthia Lummis said the SEC was investigating every single US exchange. They also added that Binance is being targeted, even as a non-US entity.

This is certainly turning out to be true. In addition to this week’s news on previous probes, he has amassed other investigations into the company. In June, news came that the agency was looking into the BNB cryptocurrency, the exchange’s native currency. This investigation is facing a lot of criticism from Zhao.

Even when not an explicit target of investigation, Binance is very reactionary to news related to the SEC and cryptocurrencies. In July, the stock exchange unlisted the Amp (AMP-USD) token in response to an investigation Coinbase (NASDAQ:CURRENCY). The SEC accused the company of completing an unregistered security offer through its AMP list. Binance dumped the token to keep away from further turmoil with the US government.

No one knows if the 2020 investigation is still ongoing or is related to comments from Lummis staff. Although, as aggressive as the SEC has been in targeting more and more cryptocurrency companies, investors may soon see an answer to this question.

As of publication date, Brenden Rearick it did not have (either directly or indirectly) positions in the securities referred to in this article. The views expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Brenden Rearick is a financial news writer for InvestorPlace’s Today’s Market team. He mainly deals with digital assets and tech stocks, with a focus on cryptocurrency regulation and DeFi.

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