SEC’s Gensler Claims ‘Similarities’ Between Binance and FTX, Yet No One Is Prosecuted

The United States Securities Chair has hinted at “similarities” between crypto exchange Binance and collapsed exchange FTX – namely their alleged use of sister firms to move funds.

Speaking to Bloomberg on June 6, US Securities and Exchange Commission Chairman Gary Gensler pointed to FTX’s alleged fraud and manipulation regarding its sister firm Alameda Research, including the alleged role played by its founder Sam Bankman. Fried played the role.

“There is a business model that bundles and blends functions in finance that we do not see, nor will we allow anywhere else,” he said.

On June 5, the SEC filed a complaint against Binance making a total of 13 allegations. One of the allegations in the lawsuit claims that funds from Binance and Binance.US were combined in an account controlled by Merit Peak Ltd., linked to Changpeng Zhao.

Another allegation claimed that Binance.US engaged in wash trading through its “primary undisclosed ‘market making’ trading firm, Sigma Chain,” which is owned by Zhao.

“Platform after platform, entrepreneurs (…) are trying to create wealth for themselves and their investors through trading against sister organizations – hedge funds – clients,” Gensler said.

So where’s the FTX lawsuit?

The recent interview is likely to add more fuel to the ongoing Twitter debate – why hasn’t the SEC sued FTX?

They didn’t sue FTX. https://t.co/FVgi5l6VcI

— CZ Binance (@cz_binance) June 6, 2023

Ripple CEO Brad Garlinghouse in a tweet on June 6 Said The latest string of lawsuits is an attempt by the SEC to “deflect” from the agency’s “FTX debacle.”

Others suggested that FTX’s large donations to political parties and Bankman-Fried’s frequent lobbying in Washington DC in the past may also have been a factor.

Why hasn’t the SEC sued FTX?

Oh that’s right they allowed public servants to take *donations* and colluded with them to further torture Americans https://t.co/EgKhB99e46

— Wendy O (@CryptoWendyO) June 6, 2023

Meanwhile, Marcus Thielen, head of research and strategy at Matrixport and author crypto titans offered a different perspective. Speaking to Cointelegraph, he explained that prior to FTX crypto was not seen as a major threat to US financial stability.

He said the collapse of three major banks this year proved otherwise.

“Initially fixing or shutting down Crypto Rail was not a priority,” Thielen said. “People realized after FTX, it’s really billions of dollars.”

Thielen also believes there is a perception of “embarrassment” for those who did not see the issues in FTX, including lawmakers.

Connected: Binance. US says user funds remain ‘safe’ amid SEC attempt to freeze assets

“You could make an argument that those people feel a little bit embarrassed and so they have to work doubly hard to rid themselves of it.”

It should be noted that although the SEC has not announced a lawsuit against FTX Exchange, the regulator has brought charges against its founders and former executives.

They include former FTX CEO Sam Bankman-Fried, former Alameda Research CEO Carolyn Ellison, former FTX co-founder Gary Wang and former FTX director of engineering Nishad Singh.

Cointelegraph contacted the SEC for comment but did not receive an immediate response.

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