The latest SEC complaint against Binance may point to why former Binance.US CEO Brian Brooks chose to step down in August 2021, just three months after his appointment.
The SEC complaint cites an "unnamed source" who briefly ran Binance in 2021, according to a June 5 tweet from cryptocurrency lawyer James Murphy, known on Twitter as MetaLawMan. .US. These dates correlate to the time when Brooks was the CEO of Binance .US. Brooks, the former top banking regulator, led the cryptocurrency exchange's operations after succeeding former CEO Catherine Corley on May 1, 2021. According to comments cited in the complaint, Brooks quickly realized he "wasn't actually running the business." Realizing this, he decided to leave and announced his resignation three months later on August 7.
However, Binance Chief Communications Officer Patrick Hillman refused Murphy's speculation, adding that it "may be one person's narrative" and "may not stand the test of time." The information comes after the US Securities and Exchange Commission filed a total of 13 charges against Binance for allegedly failing to register as a securities exchange and operating illegally in the United States. The news wreaked havoc on the prices of cryptocurrencies including Bitcoin and ether, down 5.6 percent and 4.3 percent, respectively, over the past 24 hours, according to the Cointelegraph Price Index.
Stock prices of publicly traded cryptocurrency companies in the US have also fallen sharply, with Coinbase (COIN) plunging 9% during market hours on June 5. Mark Palmer, senior equity research analyst at Berenberg Capital, told Cointelegraph that some of the details reveal ed in the lawsuit “echo” its previous lawsuits against similar US-based cryptocurrency exchanges Bittrex and Kraken. As such, Palmer argued, “these cases in general represent a rehearsal for possible lawsuits against Coinbase.”
Palmer said that if the SEC is forced to "cut or cease" much of its US operations, Coinbase investors should focus on the exchange's ability to "successfully adjust" its business model and geographic focus of enforcement. “We estimate that at least 37% of COIN's net revenue would be at risk if the SEC targeted the company's crypto token trading and staking operations.
