Former SEC Official Predicts Impending DOJ Indictment Against Binance – John Reed Stark, a former official at the Securities and Exchange Commission (SEC), expressed his belief on Twitter that the U.S. Department of Justice (DOJ) is likely to bring forth a criminal indictment in relation to Binance. Drawing on his experience in the SEC Enforcement Division, Stark pointed to several indications that suggest the possibility of criminal charges.
In light of the SEC’s recent lawsuit against Binance for securities law violations on June 5, 2023, Stark, who previously headed internet enforcement at the SEC, stated that the DOJ has already taken or will take action by filing a criminal indictment against Binance. He further highlighted that the lawsuit from the Commodity Futures Trading Commission against Binance, combined with the SEC’s latest complaint, appear to resemble criminal indictments more than typical regulatory measures.
People Also Read: Binance Silently Changes Terms of Service
Stark noted that the lawsuit from the Commodity Futures Trading Commission (CFTC) accuses Binance of aiding and abetting violations, whereas the complaint from the SEC alleges the commingling of customer funds and includes allegations of market manipulation. Additionally, Stark emphasized that the SEC is pursuing drastic measures, such as asset freezing and fund repatriation, as remedies in their case.
“Seeking such emergency relief typically means that the SEC believes they can convince a judge right now, that the defendants have committed fraud and that investor funds are at risk,” the former SEC official wrote in a Twitter post with close to 700 words. Stark also discussed the evidence presented in the SEC’s accounting declaration and the intermingling of funds and asset transfers it mentioned. “The SEC is obviously working with criminal prosecutors and FBI agents but reveals no other information,” Stark opined.
“Neither the CFTC or SEC case intensely focus on money laundering. IMHO, that is the prosecutorial space that has been carved out and reserved for a U.S. DOJ criminal prosecution relating to Binance.” Stark concludes that the DOJ is likely collaborating with officials in this case as well. “My take is that the U.S. DOJ is working with the SEC, CFTC, and multiple informants/whistleblowers, and the next axe to fall is the filing, or unsealing of, Binance-related criminal charges,” Stark’s Twitter post concludes.
People Also Read: US Senator Bill Hagerty Warns SEC Actions ‘Pave the Way’ for a CBDC
Stark has previously issued warnings about increased enforcement actions in the cryptocurrency sector. In January, he emphasized that the SEC’s charges against Gemini and Genesis for their lending platform marked the start of a “regulatory onslaught.” When asked about the possibility of a sealed indictment from the DOJ, Stark responded that such sealing could be done to prevent public knowledge due to reasons like asset dissipation or destruction of evidence.
