In a stunning revelation, Binance.US interim CEO Norman Reed has come forward to expose the Securities and Exchange Commission’s (SEC) unsubstantiated allegations against the embattled cryptocurrency exchange. Reed asserts that the SEC, under the vindictive leadership of former chair Gary Gensler, branded Binance.US a “cauldron of fraud” without producing any evidence to support these damning claims in court.
The Fallout of SEC’s Baseless Accusations
The consequences of the SEC’s lawsuit against Binance.US in June 2023 were swift and severe. Within two weeks, the exchange hemorrhaged thousands of customers and billions in assets as institutions and banks fled association with a company labeled fraudulent by the powerful regulator. The reputational damage forced Binance.US to lay off 70% of its staff as it fought for survival.
Operation Chokepoint 2.0 in Action
Reed points to the SEC’s actions as a textbook example of “Operation Chokepoint 2.0,” the controversial practice of cutting off banking and payment processing relationships to effectively shut a company down without due process. By strong-arming Binance.US’s partners with subpoenas and fearmongering, the SEC strangled the exchange’s fiat on-ramps, leaving it to subsist as a crypto-only platform.
“The debanking of Binance.US is Chokepoint in action…None of [the banks] would bank us. Because we were a cauldron of fraud, according to the SEC.”
– Norman Reed, Binance.US Interim CEO
No Evidence, No Problem for the SEC
Perhaps most galling is that when challenged in court, the SEC lawyers were forced to admit they had found no evidence to support their incendiary claims of Binance.US defrauding clients or funneling funds overseas. Yet this didn’t stop the regulator from continuing to assail the company in the press, abusing its power and influence.
Binance.US Charts a Comeback
Against all odds, Binance.US has weathered the SEC’s unrelenting assault and 18 long months operating as a shell of its former self. The firm has defiantly carried on despite restraining orders, onerous reporting obligations, and being cut off from the banking system. Reed proudly states that Binance.US expects to have USD fiat rails up and running again in the coming weeks, positioning it for a dramatic resurgence:
“We didn’t give up, and we’re a stronger company today than we’ve ever been. I’ve been telling my team for over a year that when we save this company and actually make it successful again, this will be some kind of case study.”
– Norman Reed, Binance.US Interim CEO
Separating Binance.US from Binance Global’s Troubles
It’s crucial to note that while Binance.US shares an owner in Changpeng “CZ” Zhao with its global counterpart Binance, the two are separate legal entities. Binance.US was not party to the $4.3 billion settlement Binance inked with US authorities, which included jail time for CZ. The exchange remains locked in a stalemate with the SEC to this day.
A New Era at the SEC
With a changing of the guard in the US administration and the end of Gary Gensler’s highly contentious term leading the SEC, Reed, himself a former SEC regulator, felt the time was right to speak out about the injustice Binance.US suffered. He holds out hope that under new leadership, the SEC will adopt a more balanced and collaborative approach to the crypto industry.
The Road Ahead for Binance.US
With fiat currency functionality on the horizon, Binance.US is actively courting new banking partnerships and engaging state regulators as it mounts its comeback campaign. While Reed acknowledges the exchange may never be made whole for the damage inflicted by the SEC, he remains steadfastly optimistic about the future. Against staggering adversity, Binance.US has proven its resilience and now stands poised to write its next chapter.
The story of Binance.US’s battle with the SEC is a cautionary tale of regulatory overreach and the existential threat posed by Operation Chokepoint to crypto firms. Yet it is also a testament to the tenacity and fighting spirit embodied by the industry’s pioneers. As Binance.US rises from the ashes, it is sure to be a case study in perseverance for the ages.
