SEC Summons

Here is a link to the SEC Summons on Binance.

Zhao, the CEO of Binance does not have to appear in person, but he does have to answer withing 21 days.

The SEC informs Zhao "If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint."

Mish Three-Point Binance Synopsis

1. The SEC says Binance is an illegal, unregistered entity that repeatedly broke federal securities laws and commingled client funds into accounts and corporate relationships controlled by Zhao, Binance’s Chief Executive Officer.
2. The SEC seeks to freeze all the assets at Binance
3. The SEC seek to "disgorge their ill-gotten gains with prejudgment interest"

For details of the charges, please see The SEC Seeks to Freeze Binance Assets, Bitcoin Dives Six Percent.

Third Day of SEC Crackdown on Crypto 

• The SEC filed the law suit against Binance on Monday.  
• On Tuesday, the SEC filed a lawsuit against Coinbase.
• Today, we see a summons on Binance. 

Coinbase is publicly trade. Its share price and bonds collapsed.

Coinbase Bond Collapse to Deep Junk

• The company's 3.375% notes due in 2028 recently traded at 59 cents on the dollar, down from 64.5 cents on Monday, according to MarketAxess.
• The bonds are now trading at a yield of more than 10 percentage points above Treasury bonds.

• The SEC accused Binance of illegally trading unregistered securities, commingling client funds, wash trading to inflate values, fraud, misrepresentation, purposeful evasion, and it went after Zhao, the founder of Binance, personally.
• The SEC primarily accuses Coinbase of illegally trading unregulated securities which it seeks to stop.
• The SEC seeks to freeze the assets of Binance, not Coinbase. 

In both cases, the SEC wants the companies to "disgorge their ill-gotten gains with prejudgment interest".

What's It Really About?

In my first Binance post, I asked "It is reasonably clear that Binance broke many security laws. But is that what's this is really all about?"

If it wasn't clear before, it is now. The SEC wants to end crypto exchanges, and promote Central Bank Digital Currencies.

That does not mean the attack on Binance is unjustified but understand the real motive. 

For further discussion of Coinbase and the SEC's motive please see Coinbase Shares Plunge in Response to Second SEC Lawsuit Against Crypto Exchanges

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