After the SEC sued Coinbase after Binance, Chairman Gary Gensler made important statements.
Speaking back to back to CNBC and Bloomberg, Gensler first spoke to CNBC.
Stating that the USA does not need more digital money, Gensler argued that the thousands of cryptocurrencies that can be traded on the largest crypto money exchanges Binance and Coinbase are more like investment contracts that must be registered with the SEC, rather than being a means of payment. “It is a security and must be properly recorded,” he said.
Also, claiming that there are parallels between the lawsuit against Binance and CZ and the criminal lawsuit against FTX founder SBF, Gensler was harsher in an interview with Bloomberg.
“There are parallels in the Binance and CZ lawsuit against FTX founder Sam Bankman-Fried with the alleged US fraudulent manipulation of FTX and what we've seen, and with specific arrangements with FTX.
There is also a business model that combines functions that we have not seen in finance and would not allow elsewhere.
If the cryptocurrency industry is to achieve any future success, it needs to improve its compliance and transparency.
Without them, the entire crypto industry is likely to collapse like a house of cards.”
Gensler's FTX-CZ analogy sparked backlash on Twitter.
While many users ask why the SEC hasn't sued FTX, Gemini co-founder Cameron Winklevoss said: "Being sued by the SEC meant you probably did something wrong before. But now it probably means you did something right." said.
"But the SEC didn't sue FTX," said CZ, quoting this.
They didn't sue FTX. https://t.co/FVgi5l6VcI
— CZ 🔶 Binance (@cz_binance) June 6, 2023
Although the SEC filed a lawsuit, the Binance CEO does not claim that CZ was fraudulent, but alleges that funds from Binance and Binance.US were transferred to an account controlled by Merit Peak Limited associated with CZ.
Again, the SEC argues that Binance.US is trading washes through Sigma Chain, an undisclosed market maker trading company that owns CZ.
