Unexpected Twist in Binance's SEC Battle Sheds Light on Brian Brooks' Departure
SEC Filing Reveals Anonymous Source Connected to Binance.US during Brian Brooks' Tenure
Wed, 07 Jun 2023, 01:43 am UTC
An unexpected twist has emerged in the regulatory tussle between Binance and the SEC, potentially shedding light on the abrupt departure of Brian Brooks as CEO of Binance.US in August 2021, just three months into his tenure. The revelation comes from a June 5 disclosure by prominent crypto lawyer James Murphy. The SEC's recent filing against Binance includes information from an anonymous individual who briefly served as the head of Binance.US in 2021, coinciding with Brooks' time as CEO.
Brooks, a notable figure in the banking regulation industry, took over as CEO of the crypto exchange from Catherine Coley on May 1, 2021. According to the SEC filing, Brooks soon discovered that he did not have the level of control over the company that he had anticipated. This realization reportedly led to his unexpected announcement of departure on August 7.
However, Binance's Head of Communications, Patrick Hillman, dismissed Murphy's interpretation, suggesting that it could be a subjective perspective that may not hold up under scrutiny over time. This development follows the SEC's escalation of its case against Binance, with a total of 13 charges, including allegations of operating unlawfully in the U.S. without registering as a securities exchange. Coinciding with this legal drama, U.S.-listed crypto companies experienced a significant market downturn, exemplified by Coinbase (COIN), which saw its shares drop by 9.1% on June 5.
Mark Palmer, a top-level equity research analyst at Berenberg Capital, noted similarities between the details in the lawsuit against Binance and previous actions against U.S.-based crypto exchanges Bittrex and Kraken. Palmer suggests that the collective lawsuits may foreshadow the regulatory action Coinbase could face in the future.
According to Palmer, the concern for Coinbase investors should be whether the company can successfully adapt its business and geographic strategy if it is required to significantly scale back or completely halt its U.S. operations due to SEC enforcement actions.
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