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SEC Investigating Binance and Coinbase after FTX Implosion: WSJ

Thu, 11/10/2022 - 12:39
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Tomiwabold Olajide
Binance has walked away from FTX acquisition deal
SEC Investigating Binance and Coinbase after FTX Implosion: WSJ
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According to the The Wall Street Journal, the SEC has opened an inquiry into the FTX platform, in addition to looking into Coinbase Global and Binance.

Following its abrupt collapse this week, the Securities and Exchange Commission (SEC) and Justice Department (DOJ) are looking into crypto exchange FTX, according to a person with knowledge of the situation.

Staff members from the two law enforcement agencies were in close contact on Wednesday, the source continued. While the SEC enforces civil investor protection rules, the Justice Department prosecutes criminal offenses, including fraud.

The subject of the SEC's ongoing investigation, which has been going on for months, is the business's subsidiary in the United States — FTX US.

According to SEC officials, some of the assets listed on the platform and FTX's lending product may be securities and, by U.S. law, should have been registered with the SEC before being sold to investors.

If so, the company's management of customer assets may also violate regulations governing U.S. exchanges.

Gary Gensler, the chairman of the Securities and Exchange Commission, has frequently requested that trading platforms like FTX register with the agency and abide by the same laws that govern conventional stock exchanges while vowing to enact enforcement campaigns.

Binance backs out of FTX acquisition deal

Binance has walked away from the FTX acquisition deal after reviewing the company's finances.

"As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX," Binance stated on its official Twitter page.

Related
Binance Likely to Ditch FTX Deal: WSJ Report

Another ray of hope comes as Tron founder Justin Sun says he is putting together a solution with FTX. He tweeted, "We will do everything we can to protect our users, including exchange all TRX, BTT, JST, SUN and HT on the FTX platform at a 1:1 ratio."

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About the author

Tomiwabold is a cryptocurrency analyst and an experienced technical analyst. He pays close attention to cryptocurrency research, conducting comprehensive price analysis and exchanging predictions of estimated market trends. Tomiwabold earned his degree at the University of Lagos.