Binance US Could Be Penalized, Shut Down If SEC Official's Claim Proves True

Binance US, the cryptocurrency exchange platform created by Binance, the world's largest CEX by trading volume, to serve U.S. residents could be penalized, or worse, be shut down if the latest claim by a lawyer with the U.S. Securities and Exchange Commission (SEC) is proven true.

The SEC is currently launching an industry-wide crackdown on cryptocurrency businesses and enterprises not operating under the regulations and guidelines set by the financial regulator.

And based on the recent remark of the SEC official, it looks like the financial regulator has already looked into Binance US and further investigation could penalize or even shut down the crypto exchange platform operating in the U.S.

During a Voyager Digital hearing last week, SEC lawyer William Uptergrove revealed that agency staff believes the U.S. arm of Binance "is operating an unregistered securities exchange" in the country.

And while the SEC official clarified that the views of the regulator's staff do not necessarily reflect the views of the sitting commissioners and the head of the agency, he failed to disclose if the financial regulator is currently planning to enforce any legal actions toward Binance US or any act related to his remark.

"The commission has not made any determinations on either of these issues," Uptergrove said, adding that "the staff beliefs do not represent the [view] of the commission."

Following the declaration of the SEC official, a spokesperson from Binance US shared the crypto exchange's statement.

"It is regrettable that an SEC staff member would make allegations that Binance.US and platforms like ours are operating an unregistered exchange, without specifying the assets listed on our exchange that the SEC considers to be securities," the spokesperson said.

"We, along with others in our industry, remain committed to constructive dialogue with regulators and supporting a comprehensive regulatory framework drafted and passed by Congress to ensure innovation continues in the United States," the spokesperson added.

The hearing was in connection to Voyager Digtal's intent to sell its assets to Binance US as part of its Chapter 11 bankruptcy restructuring plan.

Meanwhile, Uptegrove's comments aligned with what SEC chairman Gary Gensler said in the past.
It may be recalled that Gensler had noted that the majority of crypto trading platforms should be considered national securities exchanges, thus the need for these crypto businesses to be registered as such.