SEC Lawsuit Against Crypto Giants Binance and Coinbase: What we should know?

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On June 5, 2023, the Securities and Exchange Commission (SEC) made a significant announcement, declaring a lawsuit against two crypto market giants, Binance and Coinbase. This legal action marks a pivotal moment in the crypto industry. In this article, we will explore the details of this event and discuss how we can prepare for the potential implications that lie ahead.

What does the SEC mainly allege from 2 crypto market giants?

A. Binance Allegations:

The SEC lawsuit declares that tokens such as BNB, BUSD, SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI are considered securities by the SEC.
The complaint encompasses Binance, Binance US, CZ (Changpeng Zhao), and all CZ-associated institutions.
Investment programs like BNB, Simple Earn, BNB Vault, and BUSD on Binance US are named as part of the allegations.
Binance claims not to serve US users, but CZ allegedly instructs staff to allow trading for wealthy individuals in the US.
CZ is accused of raising funds from Binance US and transferring user assets to Merit Peak, a US company under his control, and then to third parties.
Wash trading allegations and evidence of a wash trade organization owned by CZ to inflate asset volume and price on Binance US are mentioned.
Deception and fraud claims are made against Binance and Binance US regarding their relationship.

B. Coinbase Allegations:

The SEC lawsuit identifies SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO as assets considered securities.
Staking services offered by Coinbase are claimed to be unregistered securities offerings, supported by ten US states.
The case mentions the SEC's classification of Coinbase's non-custodial wallet as a "broker-dealer," although the relationship to the overall case remains unclear.
Potential outcomes for Coinbase include fines and potential impacts on staking services, although the extent of these consequences is unspecified.

Overall, while there are similarities in terms of securities classification, failure to register, and engaging in unregistered securities offerings, there are also notable differences in the specific tokens, control structures, and allegations made against Coinbase and Binance. The cases will likely involve distinct legal battles and outcomes for each exchange.

While both exchanges face allegations of unregistered securities offerings, the specific details differ. Coinbase is accused of offering staking services without registration, while Binance is alleged to have designed a multi-step scheme to evade US law, including engaging in wash trading and facilitating unauthorized trading for US users.

What does the community think about this event?

The community's response to the SEC's lawsuit against Binance and Coinbase can be summarized as follows:

Outrage and Disagreement:

The crypto community is outraged by the actions of the SEC, particularly due to the lack of clarity provided regarding what qualifies as a security.There is a sentiment that the SEC has been arbitrary in classifying certain cryptocurrencies as securities without a consistent regulatory framework. Exchanges and members of the community have long sought clarity and guidance from the SEC on registration procedures, but their efforts have been met with limited success.Disagreement arises between the SEC and the crypto community, as many believe that the rules governing securities in the industry are unclear and open to interpretation.The community feels that they are being penalized without a clear understanding of the boundaries within which they should operate.

Support for the Companies Under Attack:

Many within the community express support for the companies and projects targeted by the SEC, including Ripple, Coinbase, and Binance. The actions taken by the SEC have resulted in increased support for these entities, as individuals perceive them as being unjustly attacked. The community believes that without concrete evidence presented in court, it is difficult to ascertain the veracity of the SEC's accusations of manipulation or fraud against Binance and Coinbase. There is a consensus that standing together against the SEC is crucial for ensuring a prosperous future for the crypto industry

Relief and Clarification:

Amid the outrage, there is also a sense of relief within the community that the SEC has finally taken action against major players like Binance and Coinbase. The long-standing uncertainty regarding the possibility of the SEC suing these prominent exchanges has now been addressed, providing a sense of closure.Some community members find solace in the fact that the SEC's jurisdiction is limited to bringing charges and cannot create new laws. There is a perception that since Coinbase received approval for listing on a stock exchange, it implies a level of approval for its business model and offerings. However, the community recognizes that this argument lacks a factual basis and that the approval primarily relates to the risk disclosure document provided to investors.

Anticipation of a Fierce Legal Battle:

The community acknowledges that the allegations against Binance and Coinbase will lead to a fierce legal battle in the gray areas of regulation. It is understood that the outcomes of these lawsuits will have significant implications for the crypto industry as a whole. Community members emphasize the importance of closely monitoring the legal proceedings and staying informed about any updates and news. In light of the uncertain outcomes, individuals are encouraged to diversify their crypto portfolios and explore alternative platforms that comply with regulatory requirements. Keeping track of regulatory developments and changes is considered vital for adapting to potential shifts in the industry.

What can we prepare for this event?

As participants in the crypto market, it is essential to closely monitor the developments of the SEC lawsuits against Binance and Coinbase. While the outcomes and potential consequences are uncertain, there are several steps we can take to prepare for this event:

Stay informed: Keep track of updates and news surrounding the lawsuits, as they will provide valuable insights into the legal proceedings and potential impacts on the crypto market.
Evaluate alternative platforms: Explore other reputable exchanges and platforms that comply with regulatory requirements. This can provide you with alternative options for trading and investment.
Follow regulatory developments: Stay informed about any regulatory changes or guidelines issued by the SEC or other relevant authorities. Understanding the evolving regulatory landscape will help you adapt to potential shifts in the industry.
Not Your Keys, Not Your Coins: After many recent events, we should not hold any significant crypto on the exchange or any third-party service provider. You should always keep your crypto in your personal wallet or multisig wallet.

Multi Signature wallets like Orosign can provide an additional layer of security against hackers. Multisig wallets require two or more private keys to authorize a transaction, making it much harder for hackers to gain access to your funds. In addition, Orosign are completely open to supporting the laws as well as supporting the early introduction of reasonable laws for digital assets to protect the interests of users.

Orosign is a Self-Managing Mobile App For Digital Assets that serves as an interface of Orochi Ecosystem, which can integrate multiple games and native decentralized applications. Orosign allows users to interact with all applications on Orochi Computation Layer and empowers customers to organize and manage their digital assets.

Orosign is designed for ease of use, even for non-crypto users. You can send, receive or store various cryptocurrencies and digital assets safely and securely with Orosign mobile app.

Currently, Orosign allows customers to create their own multisignature wallet with minimal cost as well as customize smart contracts to meet their own expectations. Off-chain signing and verification are used to secure the signing process. All proofs are verified independently with secp256k1, which is the most widely used elliptic curve in the blockchain space, thanks to its 256 bits security level. Thus, the fund is safe as long as the majority of private keys are safe

Conclusion

The SEC's lawsuit against Binance and Coinbase has sent shockwaves through the crypto market. As the legal proceedings unfold, it is essential to closely follow developments and understand the allegations made by the SEC against these two giants. While the community reacts with a mix of outrage and relief, it is crucial to remain informed and prepared for any potential impacts that may arise. By monitoring updates, diversifying investments, exploring alternative platforms, and staying abreast of regulatory developments, participants in the crypto market can navigate this event with greater confidence and resilience.

About Orochi Network

Orochi Network is a cutting-edge zkOS (An operating system based on zero-knowledge proof) designed to tackle the challenges of computation limitation, data correctness, and data availability in the Web3 industry. With the well-rounded solutions for Web3 Applications, Orochi Network omits the current performance-related barriers and makes ways for more comprehensive dApps hence, becoming the backbone of Web3's infrastructure landscape.

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SEC Lawsuit Against Crypto Giants Binance and Coinbase: What we should know?

What does the SEC mainly allege from 2 crypto market giants?

What does the community think about this event?

What can we prepare for this event?

Conclusion

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