Latest updates on regulatory events: CZ releases internal memo, Gensler criticizes two exchanges again.

Regulatory updates: CZ memo released; Gensler criticizes 2 exchanges.

Edit | Wu Talking About Blockchain

Binance team,

During these difficult times, I want to share two tweets with you.

The first one:

(Content includes Binance’s former compliance officer Sam Lin saying his company is “impossible to clean”, not optimistic about BNB, providing convenience for whales and US users to bypass KYC, and many Binance employees providing a lot of internal chat records under the SEC’s request.)

As you can see, although this is just two people “privately” ranting 5 years ago, it has caused great damage to our (and their) reputation. I want to remind everyone:

Binance is cooperating with investigators. They usually ask for our chat records first. Anything you say will one day/will appear in court (or on the internet).

For reference only, we don’t check employees’ chat records. This is actually the first time I (CZ) have seen this.

It’s outrageous for the SEC to use it in a poster, but we will let the lawyers handle it.

More importantly, if you are not satisfied with working at Binance (or any company), you should talk to your manager and may seriously consider your career choices. Don’t waste your energy and life on things you don’t like, because you won’t be good at it anyway. If you stay, make sure you love your job and our mission: financial freedom. We need people who are fully committed to this mission because we have to overcome “some” challenges to achieve this goal.

The second one:

Read the comments below the tweet. Although this is a simple tweet, you will see our users support our efforts to “keep building”. I want to convey the message I have said many times before: in difficult times, let us keep a low profile and continue to make products that people use.

Although we may still see other chat records of dissatisfied employees, or other things we (or I) accidentally said in the past, they will also find that we continue to adhere to high moral standards, and most importantly, we always do our best to protect our users. We will never compromise on this point. Even if some people deliberately choose to ignore this, the truth will prevail.

Why? Because we have our values, and we have each other and our users’ backs.

CZ

(End of article)

SEC Chairman Gensler detailed his actions in a recent interview:

Source:

https://www.theblock.co/post/233826/gensler-lays-out-blockingths-for-crypto-compliance-criticizing-binance-and-coinbase?utm_source=twitter&utm_medium=social

He said: We have flexible rules in place for the disclosures required in registration statements – SK and SX regulations – as well as registration exemptions, including A and D regulations, so that crypto securities issuers need to register their investment contract offers and sales with the SEC or meet exemptions. We have also provided guidance to market participants for years on what constitutes or does not constitute a security in the crypto asset market, including the DAO report in 2017 and the staff’s framework for analyzing digital asset investment contracts in 2019. Over 100 SEC orders, settlement actions, and court decisions have also made it clear when tokens are being sold and when they are securities, including our actions against Telegram, LBRY, and Kik.

Gensler referenced the recent action taken by the SEC against Coinbase and implicitly refuted the company’s public argument that it did not know how to comply with securities laws: Don’t believe market participants when they say on Twitter or television that their behavior wasn’t illegal because they didn’t receive adequate notice. They may have made thoughtful economic decisions to do business with enforcement risk as a cost.

Gensler noted that his agency had obtained internal communications that reportedly showed Binance executives knowingly violated the law. He quoted some of the contents in his speech: As a result of the SEC’s action against Kik, Binance insiders became aware that they needed to start preparing for subpoenas and Wells notices related to their exchange token BNB.

Gensler also noted that the SEC believed that Binance and Binance.US had reallocated billions of dollars in customer assets to investment vehicles owned by CEO Zhao Changpeng, echoing similar allegations against collapsed crypto exchange FTX and its founder Sam Bankman-Fried; and accused Binance of lying to customers about the location of their assets and actively manipulating markets to counter them.

CZ denied this allegation.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!

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