Report: Binance.US Enlists Former SEC Enforcement Official Amid Lawsuit

United States-based Crypto Exchange Binance.US Hires Former SEC Enforcement Official

According to a report from Bloomberg on June 12, Binance.US, a United States-based cryptocurrency exchange, has hired a former enforcement official from the U.S. Securities and Exchange Commission (SEC) as part of its legal team. The purpose of this hiring is to defend the exchange against allegations of operating as an unregistered securities exchange.

George Canellos, a former SEC enforcement co-director who is currently associated with the international law firm Milbank LLP, has been enlisted by Binance.US, along with three other lawyers. Canellos served in various leadership positions at the SEC for over four years before leaving in 2014.

Legal Defense in Preparation

Former SEC internet enforcement chief John Reed Stark took to Twitter, stating, “Binance is clearly preparing for a criminal prosecution and continuing to hire the best defense attorneys in the world.” He further mentioned that considering the seriousness of the fraud allegations by the SEC and the Commodity Futures Trading Commission (CFTC), a prosecutor from the Department of Justice (DOJ) would likely seek prison time for individuals convicted or pleading guilty to Binance-related crimes.

Addition of George Canellos

Canellos’ inclusion in the Binance.US legal team occurs as the U.S. firm is confronted with a lawsuit filed by the SEC. The SEC alleges that Binance.US failed to register as an exchange, broker, and clearing agency. Similar allegations were made against global exchange Binance and Coinbase in subsequent filings. The SEC also sought to freeze the assets of the U.S. exchange through a temporary restraining order.

Binance.US responded to the SEC’s court petition to freeze assets with a filing on June 12, stating, “If the Court does address the merits of the SEC’s motion, it should deny that motion.” The exchange argued that the SEC’s proposed remedies would effectively terminate its business, calling them “draconian and unduly burdensome” without any exceptions.

Implications on Binance.US Operations

Following the actions taken by the SEC, Binance.US announced on June 9 that it would suspend U.S. dollar deposits and potentially halt fiat withdrawals as early as June 13. The exchange cited the SEC’s “extremely aggressive and intimidating tactics” as the reason behind this decision.

Criticism of SEC’s Approach

Industry leaders and U.S. lawmakers have criticized the SEC for its perceived heavy-handed approach to crypto enforcement. Representative Warren Davidson proposed a bill aimed at restructuring the commission and called for the firing of SEC Chair Gary Gensler on June 12.