Understanding the SEC's regulatory timeline and responses from all parties in one article

Since the news on June 5 that "the U.S. SEC sued Binance and its CEO Zhao Changpeng for violating U.S. securities trading rules", the SEC has been taking continuous actions and has become increasingly strict in its regulatory attitude towards the cryptocurrency field. Not only have major trading platforms been deeply affected, but the market trend has also fluctuated violently.

Golden Finance sorts out the SEC's regulatory timeline to clarify the SEC's actions and responses from all parties.

June 5: SEC sues Binance

SEC: Suing Binance and its CEO Changpeng Zhao for violating U.S. securities trading rules, and filed 13 charges against Binance and Changpeng Zhao, including improper handling of customer funds and lying to regulators and investors about its operations. The SEC said Binance has been mixing billions of dollars of customer funds and secretly transferring them to an independent company controlled by Changpeng Zhao. In addition, Binance misled investors about whether its systems were sufficient to detect and control manipulative trading practices. The SEC also said that Binance did not take adequate measures to restrict U.S. investors from using unregulated exchanges. The SEC mentioned in its lawsuit against Binance that cryptocurrencies listed as securities include but are not limited to BNB, BUSD, and the following various crypto assets: SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS and COTI.

Changpeng Zhao: The Binance team is on standby to ensure the stability of the system, including withdrawals and deposits. We will respond once we see the lawsuit. We haven't seen it yet, but the media gets the information before us.

Others: BNB fell below $300 in the short term to $291.8, and Bitcoin fell more than $300 in the short term to $26,661.

June 6: SEC sues Coinbase

SEC and Coinbase:

SEC: The US SEC sued the crypto trading platform Coinbase in the New York federal court. The SEC pointed out that Coinbase, the largest crypto trading platform in the United States, evaded regulation by allowing users to trade crypto tokens that are not registered securities. Affected by this, Coinbase (COIN.O) fell more than 12% before the market. In the Coinbase case, the SEC defined SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH and NEXO as securities. The US Securities and Exchange Commission (SEC) pleaded with the court to make a final judgment, requiring the defendant and other related persons to be permanently prohibited from directly or indirectly violating the Securities Act; requiring the defendant to return all illegal gains obtained by violating the Exchange Act on a joint and several basis, and ordering Coinbase to return all illegal gains obtained by violating the Securities Act and prepaid interest; requiring the defendant to pay civil penalties in accordance with the Exchange Act and the Securities Act; and requiring the court to grant appropriate or necessary relief in accordance with the Exchange Act to protect the interests of investors.

Coinbase: In the absence of clear rules for the digital asset industry, the SEC's enforcement actions harm America's economic competitiveness and harm companies like Coinbase that have a clear commitment to compliance. The solution is legislation that allows for transparent development of fair rules of the road, not litigation. In the meantime, we will continue to operate business as usual.

other:

Report: If the SEC targets Coinbase’s crypto token trading and staking services, at least 37% of the company’s net revenue would be at risk

Alabama regulator: Coinbase's staking program violates state securities laws.

New Jersey Securities Department: Fines Coinbase $5 million.

Ten states in the United States have taken legal action against Coinbase for violating securities laws, including Illinois, Vermont, Alabama, Kentucky, California, Maryland, Wisconsin, Washington, New Jersey, and South Carolina.

Nansen data: In the past hour, since the lawsuit filed by Coinbase by the U.S. Securities and Exchange Commission (SEC) was made public, Coinbase users' net outflow on multiple chains other than Bitcoin was approximately US$57.7 million, of which US$43.1 million came from Coinbase Custody.

SEC and Binance:

SEC: Binance.US transferred at least $145 million to an entity account controlled by Zhao Changpeng, and CZ personally received $62.5 million from a Binance bank account between October 2022 and January 2023. In order to circumvent U.S. regulation of CZ, Binance, and the Binance website, CZ and Binance established BAM Management and BAM Trading in the United States, and publicly claimed that these entities independently controlled the operation of the Binance US platform. BAM Trading and BAM Management, controlled by CZ and Binance, lied to investors about their control over the Binance US platform, raised approximately $200 million from BAM Management's private investors, and attracted billions of dollars in trading volume from investors (including retail and institutional investors) who wanted to trade on the Binance US platform. CZ is the actual owner of Binance market maker Sigma Chain, which is operated by several Binance employees. The U.S. SEC’s official website deleted the resume of Hinman, a former official and key figure in the Ripple lawsuit. Hinman once said at the 2018 Fintech Week conference that the sale of ETH did not constitute a "securities transaction."

Binance.US: The SEC's lawsuit is groundless and will actively defend itself, saying that the SEC's lawsuit "is unreasonable whether based on facts, law or the Commission's own precedents" and will seek Congressional intervention to pass bipartisan legislation to create a viable regulatory system for digital assets. In addition, Binance.US also stated that over the past two and a half years, Binance.US has been in sincere contact with the SEC, and the goal of our contact has always been consistent: actively cooperate to develop a clear and practical regulatory framework that enables companies like us to grow and create jobs and provide American consumers with safe access to digital assets.

Binance has been actively responding and cooperating with the SEC investigation, but the SEC gave up and refused to communicate, instead choosing to take unilateral action to file a lawsuit. The SEC's unilateral labeling of certain tokens and services as securities will only complicate these issues, and Binance will do its best to defend the platform. In addition, Binance also stated that any allegations that user assets on the Binance.US platform have ever been at risk are false, and all user assets on Binance and Binance-affiliated platforms (including Binance.US) are safe, and Binance will actively defend any false accusations. On the contrary, the SEC's actions seem to be in a rush to gain jurisdiction from other regulators, and protecting investors does not seem to be the SEC's top priority.

Changpeng Zhao:

The SEC’s lawsuit against Binance is a great opportunity for the industry to come together and develop a set of common-sense regulatory guidelines.

A vote was launched on its social media titled "Who can better protect you? Binance or the SEC?". Currently, Binance's support rate is 84.9%, while the SEC's support rate is only 15.1%.

other:

CCTV Finance Channel (CCTV-2) Zhengdian Finance column: "Binance and its CEO were sued by the US SEC" reported.

Gary Gensler, Chairman of the U.S. SEC: Binance operates a "network full of deception and conflict." If crypto tokens have real value, the SEC is ready to work with the crypto industry to achieve compliance.

Nansen CEO: Demands the resignation of US SEC Chairman Gary Gensler.

CFTC Chairman: Recommends that Congress take immediate legislative action to address the lack of regulation of digital assets.

Lookonchain data: Before the news of the SEC's lawsuit against Binance came out, FBG Capital withdrew 35 million USDT from Binance and 9 million USDT from OKX. After the news of the SEC's lawsuit against Binance came out, FBG Capital deposited all 44 million USDT into Binance. Affected by the SEC's lawsuit against Binance, there is a lot of FUD in the market. But some institutions, whales and SmartMoney seem to be buying from the bottom.

Huang Licheng, the eldest brother of Machi, has transferred all BAYC and MAYC he holds to Binance to show his support for Binance.

Data: Binance's net asset outflow from 0:00 to 9:00 on June 6 was $2.18 billion, accounting for about 4% of the platform's total assets ($54.33 billion); within 24 hours after the news that the U.S. Securities and Exchange Commission (SEC) sued the centralized cryptocurrency exchange Binance, the trading volume of decentralized exchanges (DEX) soared 88%; the SEC's lawsuit against the cryptocurrency exchange Binance triggered volatility in the cryptocurrency market, and Coinbase's stock was also affected. According to U.S. stock data, Coinbase's closing price on Monday fell to $58.7, a drop of 9.05%, a new low in June, and its current market value has also dropped to $13.77 billion ; BTC fell below $25,500 and is now at $25,490.2, with a daily drop of 4.81%.

June 7:

SEC and Binance:

SEC: Has requested court approval to freeze assets related to Binance.US, Binance affiliate BAM and Zhao Changpeng and issued a temporary restraining order.

Binance US: User assets are safe, the platform will continue to operate fully, and deposit and withdrawal functions are normal. Released the Strong Together statement, calling on the community to unite.

Changpeng Zhao: If the court approves the restraining order, it will only affect Binance.US. Binance.com will not be affected and the funds are safe.

SEC and Coinbase:

SEC: In wallets controlled by Coinbase and segregated by asset, the company controls and pools the crypto assets of staking program investors, along with Coinbase’s own crypto assets. Coinbase also stakes its own crypto assets alongside the assets of staking program investors, including as part of the same staking pool across five protocols. In addition, Coinbase treats all crypto assets submitted by investors and segregated by staking assets as fungible assets.

Coinbase: The SEC and the U.S. Commodity Futures Trading Commission (CFTC) have issued conflicting statements, and the SEC’s enforcement approach has harmed U.S. interests.

Paul Grewal, Chief Legal Officer of Coinbase: It is disappointing that the U.S. Securities and Exchange Commission (SEC) decided to take legal action against Coinbase today, hours after the SEC sued Coinbase for alleged violations of securities laws. The solution is legislation that allows fair rules of the road to be transparently developed and equally applied, rather than litigation. Despite today's complaint, we will continue to operate our business as usual.

other:

US Court: Requires the US SEC to respond to Coinbase's rule-making petition within one week; approves the SEC's request to freeze Binance.US's assets.

Stock and cryptocurrency trading platform Robinhood: This week, it may delist the tokens mentioned in the lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Binance and Coinbase. Dan Gallagher, former U.S. Securities and Exchange Commission commissioner and chief legal and compliance officer of Robinhood, testified to the House Agriculture Committee on Tuesday: "We are actively reviewing the SEC's analysis to determine what action, if any, to take in this regard."

Justin Sun: Expressing my support to Coinbase and the entire crypto community during this challenging time.

Crypto law firm Gresham International: Crypto companies are advised not to do business within the United States, where regulatory policy has become unpredictable, suggesting that cryptocurrencies are unwelcome even for those who try to follow the rules.

a16z policy director: US SEC should cooperate with cryptocurrency companies.

Bloomberg: Coinbase faces a life-and-death test in its legal battle with the U.S. SEC. The SEC's enforcement push is particularly unfavorable to Coinbase. More than 80% of Coinbase's revenue last year came from the United States, and now its business model is facing a near-existential threat.

Timothy Massad, former chairman of the U.S. Commodity Futures Trading Commission (CFTC), said the future of cryptocurrencies will depend on the outcome of the government’s recent lawsuits against crypto exchanges Binance and Coinbase.

Bernstein: Whether cryptocurrency tokens are securities or commodities is at the heart of the SEC’s charges against Binance and Coinbase.

According to the Bloomberg Billionaires Index: In the past two days, Binance CEO Changpeng Zhao's net worth has shrunk by $1.4 billion to $26 billion, while Coinbase CEO Brian Armstrong's net worth has shrunk by $361 million to $2.2 billion.

U.S. Treasury Secretary Yellen: Supports U.S. regulators' regulation of cryptocurrencies.

Ripple CEO: The US SEC sued Binance and Coinbase to distract attention from their inaction on the FTX issue.

NBA Dallas Mavericks owner: The SEC turned a blind eye to financial scams on Twitter but sued Coinbase.

South Korea’s Financial Services Commission: Postpones filing of business registration changes for Binance’s acquisition of Gopax.

Coinbase stock price: fell below the $50 mark, and its market value has shrunk by $2 billion compared to yesterday.

Binance.US Price: Bitcoin sees a premium of nearly $400. The premium of Bitcoin on Binance.US may indicate that users are trying to transfer their assets into the most important cryptocurrency to withdraw them immediately.

Lookonchain monitoring: After the US SEC sued Binance and Coinbase news reports, Cumberland withdrew 20,000 ETH (about 37 million US dollars) from Coinbase and 4,850 ETH (about 9 million US dollars) from Binance, totaling 24,850 ETH.

Two U.S. senators: Criticized the U.S. Securities and Exchange Commission (SEC) for filing a lawsuit against cryptocurrency exchange Coinbase.

U.S. Republican Congressman Hill: The Binance case shows that cryptocurrencies need clear (regulatory) rules and frameworks, and digital asset legislation is being formulated to bring clarity.

Bank of America: After the U.S. SEC launched a lawsuit against crypto exchanges, Coinbase faces more and more regulatory challenges.

Nasdaq CEO: We are assisting the U.S. Financial Industry Regulatory Authority and the SEC in their litigation enforcement against Coinbase.

June 8:

SEC: The SEC adopted changes to its securities rules to remove and replace references to credit ratings from existing exceptions provided for in Rules 101 and 102 of Regulation M, a set of rules that prohibit activities that could artificially influence the market for an issued security. Binance transferred nearly $20 billion in commingled funds to a foreign subsidiary of Paxos in 2021.

The U.S. Securities and Exchange Commission (SEC) asked Binance CEO CZ to appear in court in the District of Columbia. CZ said this was just part of the SEC's compliance process. He does not need to appear in person, but needs to respond within the specified time.

New SEC court documents: CZ and Guangying Chen have problems with mixing platform and private funds.

Binance:

Binance.US Announcement: Some trading pairs will be delisted and over-the-counter trading will be suspended.

Binance.US updates delisting announcement: no more USDT-related trading pairs will be delisted

Changpeng Zhao: Confirmed that I have received a subpoena from the U.S. District Court, but I do not need to appear in court in person, so no need to FUD.

Binance lawyer: Since SEC Chairman Gensler once offered to serve as an advisor to Binance, he has been asked to recuse himself from any actions involving Binance.

Coinbase: Operating as usual, no risk of customer runs, will not abandon staking business; Coinbase and Binance are completely different, and the lawsuit is also completely different: Coinbase has no allegations of misappropriation of customer funds and has not been named in the lawsuit. Coinbase is headquartered in the United States and has never operated a hedge fund or anything that trades with customers. All financial statements are audited; Gensler's views do not represent the US government.

Coinbase Chief Legal Officer: Coinbase has not made any decision to delist any assets.

Coinbase CEO: The last meeting with SEC Chairman was received coldly.

other:

U.S. Treasury Secretary Yellen: SEC's actions are appropriate.

Coingraph News: The news released yesterday that the US SEC’s application to freeze Binance.US-related assets was approved by the court has not been confirmed.

Binance.US: Multiple currencies are trading at a premium, with BTC exceeding $28,000.

Kenny, co-founder and COO of Manta Network: Gary Gensler once sent his report on BNB to CZ and encouraged Kenny to get more involved in crypto.

CoinShares Research Director: Regulatory certainty will become a key factor for digital asset participants.

Cathie Wood, CEO of Ark Invest: Coinbase can benefit from the U.S. Securities and Exchange Commission (SEC) scrutiny of Binance.

Dune@21Shares data: Since the U.S. Securities and Exchange Commission (SEC) took enforcement action against Coinbase on June 6, 35,810 cbETH have been redeemed, worth approximately $65.7 million.

June 9:

SEC: Requests the court to allow it to serve documents to Binance and Zhao Changpeng by "alternative methods".

Binance US: will suspend US dollar deposits, and its banking partners plan to suspend US dollar withdrawal channels on June 13.

Changpeng Zhao: Unless users actively withdraw, user funds will never leave the Binance.US platform. Denies receiving $12 billion in Binance.US user funds.

Coinbase: Chief Legal Officer Believes SEC Misinterpreted the Law

other:

SEC Chairman Gensler: Comply with the regulations, otherwise you may also be sued; crypto securities issuers need to register their offers and sales of investment contracts with the SEC, or meet exemption requirements; the vast majority of crypto tokens meet the investment contract test, and most crypto intermediaries must also comply with securities laws.

Senators Elizabeth Warren (D-MA) and Chris Van Hollen (D-MD): Asked the Department of Justice (DOJ) to investigate Binance for allegedly lying to lawmakers.

U.S. Senator Bill Hagerty of Tennessee: The SEC’s recent actions may be aimed at paving the way for the issuance of CBDC.

Animoca co-founder and chairman Yat Siu: The SEC’s focus is on the United States.

Cryptocurrency investment company Galaxy Digital is accelerating the transfer of its business overseas. Galaxy Digital CEO Mike Novogratz said that the regulatory environment makes the cryptocurrency market a difficult place.

Rating agency Moody's: Confirmed the rating of cryptocurrency trading platform Coinbase as B2, the senior debt rating as B1, and the outlook was adjusted from stable to negative.

Protocol Labs: Filecoin is not a security.

Cardano Development Company: ADA should not be classified as a security by the SEC under any circumstances.

U.S. House Financial Services Committee: Releases draft proposal for stablecoin regulation.

Data: Coinbase CEO sold $1.8 million worth of stock before the US SEC sued him.

Rumor: The US SEC may list Crypto.com as the next target for prosecution.

June 10:

Binance:

Changpeng Zhao: Binance's net outflow of assets in the past 24 hours was approximately US$392 million.

other:

Related: The U.S. Securities and Exchange Commission’s (SEC) lawsuit against Binance and Coinbase could shape the U.S. legal and political system for years to come.

Data from blockchain analysis companies Nansen and Glassnode: After the US SEC enforcement, approximately US$4 billion flowed out of Binance, Coinbase and Binance.US.

U.S. Senator Cynthia Lummis: Expresses strong opposition to the SEC's legal action against Coinbase.

Trader: Before the US SEC sued Binance, traders initiated BNB sell orders worth tens of millions of dollars.

Glassnode data: After the SEC sued Binance and Coinbase, Bitcoin holders' realized losses in the past four days of this week reached $798 million, exceeding realized profits. During this period, the realized losses on June 5 were higher, indicating that the SEC's lawsuit against Binance was more likely to trigger a sell-off than the lawsuit against Coinbase.

Kaiko: The Bitcoin price spread of Binance.US is about 20 times higher than that of Coinbase and Kraken.

American lawyer Brian Frye: The SEC lawsuit may lead to the closure of Binance in the United States, and the situation of Coinbase is more optimistic.

Polygon founder: suspected response to MATIC being identified as a security by the US SEC, considering it to be temporary noise and continuing construction.

June 11:

Coinbase CEO: Coinbase has shared its coin listing review framework with the SEC; will not give up on development in the United States and looks forward to a change in policy direction after the election; trading crypto products does not require the multiple registrations mentioned by the SEC in the lawsuit.

other:

Founder of the SEC’s Office of Internet Enforcement: Crypto platforms will face a new round of regulatory siege.

Former SEC Cyber ​​Director: It is quite unfair for the SEC to single out tokens for prosecution.

Solana Foundation: Disagrees with the US SEC’s characterization of SOL as a security.

Fortune: Legal experts believe that the U.S. SEC is likely to bring criminal charges against Binance; the U.S. Department of Justice may have delayed filing a lawsuit against Binance due to ongoing settlement negotiations.

June 12:

Coinbase: CEO believes U.S. crypto industry needs regulatory clarity.

other:

Registered Investment Advisor Yusko: The SEC’s regulatory attack against Binance and Coinbase goes beyond the boundaries of due process.

Ripple General Counsel: The SEC is hypocritical.

Cameron Winklevoss, co-founder of the crypto exchange Gemini: The anti-crypto war by the U.S. SEC Chairman and others will cause the Democratic Party to lose the 2024 election.

Circle CEO: If regulation eventually involves stablecoins, it will put it in a leading position.

John Reed Stark, former lawyer of the U.S. Securities and Exchange Commission (SEC): Urge users to withdraw assets from crypto platforms.

Defillama data: In the past 7 days, Binance funds had a net outflow of US$3.38 billion.

JPMorgan Chase: The U.S. SEC's crackdown on cryptocurrencies has increased the urgency for lawmakers to develop a regulatory framework this year.

Data: Since the US SEC lawsuit, Binance.US’s market depth has dropped 78%.

June 13:

SEC: Former director of the U.S. SEC’s Office of Internet Enforcement: The U.S. Department of Justice will file or has filed criminal charges related to Binance.

Binance:

Binance US: SEC's move to seek asset freeze will put the company in trouble; hired former SEC enforcement division co-director for defense.

The lawyer representing BAM Trading, the parent company of Binance.US, responded: Zhao Changpeng owns BAM Trading’s bank account but does not have signing authority.

Coinbase:

Coinbase Vice President of International Policy: Preparing to build in Abu Dhabi and Canada.

other:

SEC Chairman Gary Gensler: Not liking regulatory information does not mean not receiving it.

U.S. Congressman Warren Davidson: Submitted a bill calling for the dismissal of U.S. SEC Chairman Gensler.

Jay Clayton, former chairman of the U.S. Securities and Exchange Commission: Cryptocurrency and blockchain are just technologies, and their integration into the financial system is indisputable.

0xScope data: Binance’s net inflow in the past 24 hours reached US$477 million.

Chairman of the U.S. SEC: Satoshi Nakamoto’s innovation has promoted the development of encrypted assets and underlying blockchain technology.

June 14:

SEC:

The U.S. SEC and Binance sought to reach a compromise on the U.S. asset freeze, with the main provision allowing the assets to be unfrozen being that Binance may not, under any circumstances, pay or transfer any assets to any Binance entity or person or entity acting on behalf of Binance.

It expects to take 120 days to respond to Coinbase's rulemaking request. It has not yet decided what action to take on the request and downplayed Coinbase's request for expedited action, saying it may be due to the "weakness" of its request. In a filing with the U.S. Court of Appeals for the Third Circuit, it insisted that the petition should be denied.

Binance:

Changpeng Zhao: Binance has not sold Bitcoin or BNB, and still holds FTT.

other:

US judge: Rejects the US SEC’s request to freeze Binance.US assets.

Chairman of the U.S. House of Representatives Banking Committee: Requests the SEC to withdraw its proposal to define exchanges.

US SEC: Earn $14 billion from cryptocurrency crackdown in 2022.

Cryptocurrency industry leaders: urge Congress to act in SEC crackdown on digital assets.

US lawmaker: House committee to vote on cryptocurrency bill in coming weeks.

The US SEC lawyer in charge of the Binance lawsuit: "We are open to allowing Binance to continue operating its business."

Data: BNB briefly broke through $250 and is currently priced at $249.2, with a 24-hour increase of 8.53%.