The biggest crypto exchange, Binance, requests that its Cyprus branch be deregistered to concentrate on its broader European operations. This action was taken as regulatory scrutiny increased, and the U.S. Securities and Exchange Commission (SEC) recently launched a lawsuit. Changpeng Zhao, the CEO of Binance, has refuted claims of market manipulation and selling Bitcoin to boost the value of BNB. A federal judge urges the SEC and Binance to come to a compromise, highlighting the continued legal difficulties the cryptocurrency industry is now facing.
Binance shifts focus on ensuring MiCA compliance
The securities regulator website revealed on June 14 that Binance’s Cyprus division had submitted a request to be deregistered from Cyprus’ list of crypto asset service providers. The crypto exchange said this would free up its attention to concentrate on its larger European companies.
According to a report from Reuters, the exchange announced in October 2022 that it had registered with the Cyprus Securities and Exchange Commission. On June 14, a source at the regulatory body said that Binance never started doing business in Cyprus.
The exchange had previously stated on its website that the Cyprus registration enabled the crypto exchange to provide spot trading, custody, and other services in conformity with Cyprus’ anti-money laundering and counter-terrorist financing regulations.
Before implementing the EU’s crypto asset rules (MiCA), a representative for the exchange indicated the company was stepping back from Cyprus to focus more intently on its other businesses in the European Union.
The spokesperson stated that intensive efforts are underway to ensure complete compliance with MiCA within the next 18 months. As part of this commitment, the exchange has opted to reduce its activities in Cyprus and shift focus towards fewer regulated entities in the EU, particularly emphasizing established markets like France, Italy, and Spain. The crypto exchange will continue to comply with all applicable laws of the European Union.
The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Binance on June 5, along with its founder Changpeng Zhao and the owner of its ostensibly independent U.S. exchange. In response to the SEC’s allegations, the exchange said it would vigorously defend itself. According to it’s website, it has licenses and registrations in six countries that make up the European Union, including France and Italy.
Increasing regulatory scrutiny: Binance faces a lawsuit and asset freeze attempt
A report from media houses stated that Changpeng “CZ” Zhao, debunked reports that the largest cryptocurrency exchange, Binance, has been selling bitcoin to prevent the price of bnb coin (BNB) from falling below specific thresholds.
“Binance have not sold BTC or BNB. We even still have a bag of FTT,” Zhao tweeted early on June 14, using his infamous “4” moniker. He suggested there could be short interest among Crypto Twitter members fueling the supposed rumors.
A tweet from @52kskew claims that starting June 14, USDT reserves have significantly increased in BNB. To lessen the erratic nature of BTC, BNB is being traded for BUSD. Another tweet from @JW100x explained that buying BNB after selling spot Bitcoin protects against liquidation while restricting Bitcoin’s upside potential. This state of affairs has been compared to a fragile house of cards.
According to reports, CZ said in a tweet from June 13 that the crypto exchange still possessed “a bag” of FTX Token FTT and that Binance had not traded any of its or BNB
— FTX’s native coin, a now-defunct cryptocurrency exchange.
SEC accuses Binance of mismanaging funds and seeks asset freeze
On June 13, a federal judge encouraged the Securities and Exchange Commission to reach an agreement with Binance that would permit the international cryptocurrency exchange to conduct business in the country even while it defends itself against a civil fraud claim brought by the agency.
On June 5, the SEC accused Binance and its U.S. affiliate of mismanaging consumer money and misleading regulators. Additionally, it wanted to freeze the company’s U.S. assets, which, according to Binance, would force it to close operations there.
Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia requested a meeting between the two parties to discuss a potential asset freeze agreement at a hearing in Washington on June 13. She made the case that the parties were closer to a settlement than their court papers indicated. Judge Jackson commanded them to continue their discussions and provide a status report by June 14.
The actions against Binance are part of a more ferocious regulatory campaign on the cryptocurrency sector. The SEC sued Coinbase, the biggest U.S. exchange, for transacting in unlicensed securities a day after launching the Binance action.