The US securities chairman has hinted at “similarities” between cryptocurrency exchange Binance and collapsed exchange FTX namely their alleged use of sister companies to move funds.
On June 6, Gary Gensler, chairman of the US Securities and Exchange Commission, pointed out in an interview with Bloomberg that FTX is suspected of defrauding and manipulating its sister company Alameda Research, including the role played by its founder Sam Bankman-Fried." There is a business model that bundles and mixes capabilities that we don't see in finance and we don't allow to see elsewhere," he said.
On June 5, the US Securities and Exchange Commission filed a lawsuit against Binance, bringing a total of 13 charges. One allegations in the lawsuit allegations that funds from Binance and Binance.US were mixed into accounts controlled by Merit Peak Limited, an affiliate of Changpeng Zhao.
Another charge alleges that Binance.US engaged in sham trading through Sigma Chain, a “principally undisclosed 'market maker' trading firm owned by Zhao.” “Platform after platform, entrepreneurs are trying to create wealth for themselves and their investors by trading with c clients through sister organizations hedge funds,” Gensler said.
The recent interview may add fuel to the ongoing debate on Twitter - why didn't the SEC sue FTX? In a June 6 tweet, Ripple CEO Brad Garlinghouse said the latest spate of lawsuits was an attempt by the SEC to “divert” attention from the agency’s “FTX debacle.”
Others believe that FTX's large donations to political parties and Bankman-Fried's frequent lobbying in Washington, DC in the past may also be a factor. Meanwhile, Markus Thielen, head of research and strategy at Matrixport and author of Crypto Titans, offered a different per perspective .In an interview with Cointelegraph, he explained that prior to FTX, cryptocurrencies were not considered a major threat to US financial stability.
The failures of the big three banks proved this year otherwise, he said. "Fixing or stopping the encrypted track was not an immediate priority initially," Thielen said. "People realized that after FTX, it was really billions." Thielen also believe s that There is a notion of "embarrassment" for those who did not foresee FTX's problems, including lawmakers. "You could tell those people felt a little embarrassed, so they had to work extra hard to really stay away from it." Notably, while the The SEC has yet to announce a lawsuit against the FTX exchange itself, the regulator has brought charges against its founder and former executives.
These include former FTX CEO Sam Bankman-Fried, former Alameda Research CEO Caroline Ellison, former FTX co-founder Gary Wang, and former FTX Director of Engineering Nishad Singh. The SEC declined to comment.
