SEC building. Source: Adobe / qingwa
The recent $4.3 billion settlement between Binance and various US government agencies, announced by top Biden administration officials, has stirred controversy due to the absence of Securities and Exchange Commission (SEC) Chair Gary Gensler at the announcement.
While Attorney General Merrick Garland and Treasury Secretary Janet Yellen were present, Gensler’s absence raised eyebrows, especially considering the SEC’s ongoing legal dispute with Binance, the influential business news outlet Wall Street Journal reported on Monday.
Citing insiders “familiar with the matter,” the report revealed that the SEC was not part of the extensive settlement talks that led to Binance and its founder, Changpeng Zhao (CZ), pleading guilty and resolving civil charges with the US Treasury Department.
The absence of the SEC indicates the challenges and high stakes involved in settling with a regulatory body that, although lacking the authority to imprison individuals, holds significant power to disrupt and potentially shut down US companies that operates in the crypto space.
Futile attempts at reaching settlement with SEC
Before the SEC filed its lawsuit against Binance in June, attempts to reach a settlement were reportedly futile, as the parties couldn’t agree on terms.
According to the Wall Street Journal’s sources, a settlement on the SEC’s terms could have compelled Binance to shutter much of its US crypto trading operations and accept claims that its “affiliates engaged in manipulative trading.”
The report also said that various government agencies before filing the lawsuit against Binance tried to get the company to accept an injunction, a deal that would reportedly prevent Binance’s US arm from offering trading in many of the tokens it had listed at the time.
“That would sort of be the end of Binance.US,” Lee Reiners, an economics lecturer at Duke University, told the Wall Street Journal.
Now, however, Binance appears to remain steadfast in defending its case against the SEC, saying in a comment “We remain confident in our case against the SEC and will continue to defend our platform vigorously.”
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