SEC vs. Binance: Justice or Corruption? ⚖️

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👋 Friends, Rallie here. The newsletter that’s working 9 to 5 to bring you the crypto, finance, and tech news.

On the menu:

• ⚖️ SEC vs Binance: Justice or Corruption?

• 🗞️ Headlines That Hit

• 📈 Refresh: BNB

• 🤓 Trivia Tuesday

• 💯 Top Tweets

The Rallie Recap

💥 Yesterday, news broke that the Security and Exchange Commission (SEC) is suing Binance, the world’s largest crypto exchange, and its founder for commingling customer funds. Binance claims the SEC has a vendetta against the industry. Here’s what you need to know: 

• Binance is the world’s largest crypto exchange, and its services include online trading, crypto wallets and financial programs. The company also has its own blockchain-based token called BNB.

• So, what’s happening? Several insiders, including two Binance US executives, have come out to expose the company’s operations as an unlawful unlicensed securities exchange for high-value investors. 

• The lawsuit alleges that Binance offered the sale of securities, without a license, and that the company knew they were selling securities, unlawfully. Yikes.

• And it gets worse. According to bank records, a senior Binance executive was the main operator for five bank accounts that belonged to the company’s “independent” US affiliate, where American customer funds were held. 

• Investor protection gone. The SEC alleges that Binance willfully evaded commodities laws through “intentionally structuring entities” so that US regulations to protect investors could not be enforced. Some popular tokens were labeled as “securities” and deprived investors of material information in their investment schemes.

• Binance CEO, CZ, claims these charges are an “incomplete recitation of facts.”

• The SEC is looking for Binance to be blocked from participating in crypto and acting as a broker/clearing house, for civil monetary penalties, and to pay back profits gained by their illegal conduct.

• News of the charges caused many coins to drop in price, and Coinglass found nearly $250M worth of trading positions were liquidated within four hours. Bitcoin also slumped to its lowest price since April before rebounding this morning.

• Regardless, Binance is defending itself against the SEC, as they argue the allegations are simply wrong, and that they have actively cooperated with the agency’s investigations and were engaged to reach a negotiated settlement to resolve investigations. However, “the SEC abandoned that process and instead chose to act unilaterally and litigate… Binance is an easy target now caught in the middle of a U.S. regulatory tug-of-war.”

• The SEC also has its supporters, and each side are prepared to fight in court. But what does this mean for crypto regulation? Time will tell.

Headlines That Hit

•  Will it sell? Apple announces their new augmented and virtual reality headset selling at $3,499 (more than 3x Meta’s price) coming early next year. 

• 🇸🇻 $1 billion mining farm. El Salvador looks to create one of the world’s largest Bitcoin mining farms. 

• 🤝 One battle won… Hollywood strikes a deal with its directors but the writers strike and talks with the actors union are still pending.

• 🤨 Another walkout. Twitter loses two executives in charge of trust and safety because of Elon Musk’s actions.

• 🤖 The international AI problem. The EU is pushing for online platforms to add labels on content generated by AI to combat disinformation.

• 🇺🇸 Potential liquidity drain. US bank shares unstable as the responsibility to replenish the Treasury’s general account could rely on draining bank reserves.

Rallie Refresh: BNB

📈 With today’s story, all eyes are on Binance’s cryptocurrency, BNB. We’re here to fill you in on this asset, so let’s learn!

🧐 What is Binance Coin (BNB)?

• BNB is a cryptocurrency issued by the Binance exchange, it is the native currency of the company’s blockchain, Binance chain. 

• Every quarter, 1/5th of Binance’s profits are used to repurchase and permanently destroy Binance coins held in its treasury.

• It can be used for discounted trading fees, payments or transaction fees (on the Binance Chain), travel bookings, entertainment (ex: virtual gifts), online services (such as paying for Canva), and financial services (eg: taking out a loan at ETHLend). 

• The BNB market is where BNB is bought and sold with most purchases taking place on the secondary market.

🤔 Before deciding whether to purchase BNB, be aware of the risks associated with investing in this cryptocurrency. Always DYOR to set your expectations for any asset you invest in.

Fun Fact

📈 The answer for Thursday’s newsletter (what was the highest amount paid for a NFT?) is $91.8 million! Tune in next time for today’s fun fact answer.

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DISCLAIMER: This is not financial or legal advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.