Gary Gensler Compares Binance to FTX Yet The Latter Never Got Investigated

binance-mobile Binance.US

In the competitive and rapidly evolving world of digital currencies, observing the FTX anomaly is interesting. Unlike its contemporaries in the crypto arena, the central trading platform has so far escaped the grip of legal proceedings instituted by the Securities and Exchange Commission (SEC). This fact hasn’t escaped the notice of many within the crypto community.

Examining the SEC’s Concerns

A significant point of contention lies in the questionable practices of digital currency exchanges such as Binance and the now-defunct FTX, specifically their alleged utilization of affiliated entities to transfer assets. Gary Gensler, Chair of the U.S. Securities and Exchange Commission, shared his insights during a recent interview with Bloomberg.

Drawing attention to FTX’s purported fraudulent activities, Gensler cited its close relationship with Alameda Research and hinted at the suspicious role that its founder, Sam Bankman-Fried, might have had in these actions. He voiced concern over a murky business model that “bundles and commingles functions,” something he asserts wouldn’t be permissible in traditional finance.

SEC Targets Binance: An Examination of the Charges

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On June 5, a storm started brewing for Binance as the SEC pressed forward with 13 charges against the exchange. Central to these allegations is the claim that Binance and its U.S. counterpart funneled funds into an account supervised by Merit Peak Limited, a company closely associated with Changpeng Zhao, the head of Binance.

Further allegations suggest Binance.US may have engaged in wash trading, a deceptive practice, via its primary covert ‘market making’ trading firm, Sigma Chain, also owned by Zhao.

Entrepreneurs Building Wealth

In Gensler’s view, the narrative repeats itself across various platforms in the cryptocurrency sector. Entrepreneurs and their investors create personal wealth by exploiting clients through associated entities such as hedge funds. These platforms conduct transactions often to the client’s detriment, suggesting a significant lack of integrity and transparency in the sector.

A question that keeps resurfacing is: why hasn’t the SEC pursued FTX as it has other platforms? Brad Garlinghouse, Ripple CEO, tweeted on June 6, hinting that the series of lawsuits might be an SEC smokescreen to detract from the ongoing ‘FTX debacle.’

Other crypto community members conjecture that FTX’s notable political donations and Bankman-Fried‘s active lobbying efforts in Washington D.C. could have played a part in keeping the SEC at bay.

Investigating the Actions of the SEC against FTX Executives

While it is crucial to underline that the SEC has not formally charged FTX as an exchange, the regulatory body has taken action against its founders and ex-executives. Some of these individuals include the former CEO of FTX, Sam Bankman-Fried, previous Alameda Research CEO Caroline Ellison, ex-FTX co-founder Gary Wang, and Nishad Singh, a former Director of Engineering at FTX.

As the SEC intensifies its scrutiny on cryptocurrency platforms, the future of these exchanges lies in the balance. Will FTX continue to evade legal pursuit? Only time will reveal the answer. Until then, the unfolding drama of the SEC’s investigations continues to capture the attention of the global cryptocurrency community.

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