- SEC has moved a motion to file sealed court documents against Binance.
- Observers warn that bad news might be coming.
- The exchange recently delisted sanctioned banks from its P2P service.
A recent development in the ongoing U.S. Securities and Exchange Commission (SEC) civil lawsuit against Binance has observers bracing for bad news.
The commission submitted a sealed motion on August 28, petitioning a federal judge for leave to file documents under seal in the regulator’s case against Binance, Binance.US, and Binance CEO Changpeng Zhao.
Is Binance Under a Criminal Probe?
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While Binance has not issued an official statement on the matter, former SEC Chief John Reed Stark believes the move by the commission to file sealed documents against Binance could be connected to an ongoing criminal probe by the Department of Justice (DOJ).
“In my opinion, and this is only a guess, the U.S. SEC‘s secret and extraordinary court filing, which appears to be highly comprehensive, likely touches upon nonpublic Binance-related money laundering allegations or other potential criminal conduct,” said the former SEC Chief.
Binance has been on the receiving end of regulatory onslaught for a while now. The crypto exchange is a target for several investigations in the U.S., including DOJ’s national security division inquiry into Anti-Money Laundering (AML) violations.
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The Move to Comply with International Financial Sanctions
Although Binance is unlikely to oppose the SEC’s move for fear of potentially scathing criminal allegations relating to its activities, the exchange has made several changes in recent days, seen as a move to comply with international financial sanctions.
On August 24, Binance delisted sanctioned Russian banks from its P2P payments service, with an official from the exchange noting that the move was meant to address and remediate new gaps.
The exchange reportedly made a similar move with one of Venezuela’s largest banks, Banco de Venezuela, sanctioned by the U.S. Treasury Department in 2019.
Read why Binance is under scrutiny for flouting Russian sanctions:
Binance Under Scrutiny for Enabling Russian Transfers Despite U.S. Sanctions
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