SEC’s Gensler claims a ‘parallel’ between Binance FTX and Binance, but one was not sued

SEC’s Gensler claims a ‘parallel’ between Binance FTX and Binance, but one was not sued

Several members of the crypto-community have pointed out that “every major player except FTX has been sued by SEC”.

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The United States Securities Chair has hinted that there are “parallels”, namely the alleged use by both crypto exchange Binance, and the collapsed exchange FTX of sister companies to move money.

In an interview with Bloomberg, U.S. Securities and Exchange Commission chair Gary Gensler referred to FTX’s alleged fraud and manipulative practices regarding Alameda Research and the alleged involvement of its founder Sam BankmanFried.


SEC’s Gary Gensler speaking with Bloomberg’s David Westin. Source: Bloomberg

He said, “There is a business model which bundles and combines functions, that we do not see nor would we permit elsewhere in finance.”

The SEC has filed a complaint on June 5 against Binance, bringing 13 charges. The suit alleges that funds from Binance and Binance.US have been mixed into a Merit Peak Limited account.

A second allegation is that Binance.US engaged wash trading via its “primary, undisclosed market-making’ trading firm Sigma Chain”, which is owned Zhao.

Gensler said, “Platform after Platform, entrepreneurs […] try to build wealth for them and their investors by trading against customers through sister organizations — the hedge funds.”

Where is the FTX suit?

The interview will likely add fuel to the debate that has been going on Twitter: Why hasn’t SEC sued FTX yet?

In a tweet dated June 6, Ripple CEO Brad Garlinghouse stated that the newest string of lawsuits are an attempt by SEC to “distract from” the agency’s FTX “debacle.”

Other people suggested that the sizeable donations made by FTX to political parties in the past and Bankman-Fried’s frequent lobbying of Washington D.C. could be factors.

Markus Thielen is the head of Matrixport’s research and strategy and the author of Crypto Titans. He has a completely different view. He told Cointelegraph that, before FTX was launched, crypto wasn’t seen as a threat to U.S. economic stability.

He said that the fall of three major financial institutions this year proved otherwise.

Thielen said that initially, fixing or stopping the crypto rails was not a priority. “People realized it was really billions after FTX.”

Thielen believes that there is a sense of “embarrassment”, for those who did not anticipate the problems at FTX. This includes lawmakers.

Related: Binance. US claims user funds are’safe’ despite SEC attempts to freeze assets

You can argue that these people are a bit embarrassed, and so they need to work twice as hard to distance themselves.

The SEC, while not announcing a lawsuit against FTX itself, has filed charges against the exchange’s founders and ex-executives.

Former FTX CEO Sam Bankman Fried, former Alameda CEO Caroline Ellison , former FTX founder Gary Wang, and former FTX director of engineering Nishad Singh are among the list.

Cointelegraph reached out to the SEC but received no immediate response.

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