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SEC Accuses Binance.US of Not Cooperating With Investigation as Executives Exit
Crypto | Sep 15, 2023
Image: Unsplash/Loic Leray
Binance.US grapples with heightened SEC scrutiny and internal upheavals, marking a tumultuous phase for the leading crypto exchange
- The U.S. Securities and Exchange Commission (SEC) has accused Binance.US of not cooperating in an ongoing probe.
- The SEC alleges that the company's staking, clearing, and brokerage services violate federal securities law.
- The regulatory body is particularly concerned about Binance.US's use of Ceffu, a custody service offered by Binance's international arm. This, according to the SEC, violates a previous agreement intended to ensure that only local U.S. staff have access to funds.
Executives Exit and Internal Changes
- Adding to the complexity, key risk executives are leaving or recently exited Binance.US. company:
- Krishna Juvvadi, the head of legal;
- Sidney Majalya, the chief risk officer;
- This comes on the heels of the departure of Binance.US CEO Brian Shroder, who left the company amid layoffs of roughly a third of its workforce.
- Norman Reed, Binance.US's chief legal officer and general counsel, will step in as interim CEO.
- Reed is an alum of the SEC, having spent six years as special counsel in its market regulation division.
- His appointment follows Brian Brooks, who left the role citing differences over strategic direction.
See: SEC’s Sealed Court Filing Raises Eyebrows for Potential Binance Setback
The regulatory challenges facing Binance.US are a microcosm of the broader issues affecting the cryptocurrency industry. As the SEC tightens its grip, the company is undergoing significant internal changes, including executive departures and layoffs.
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