Headline RoundupJune 6th, 2023

SEC Sues Coinbase and Binance, Alleging Unregistered Securities Trading

AllSides Summary

The Securities and Exchange Commission sued Coinbase and Binance, the largest cryptocurrency trading platforms in the U.S. and the world, respectively.

The Details: Regulators accused Coinbase of failing to register as a securities exchange. The Binance allegations include trading unregistered securities as well as accusations that it created a separate exchange, Binance.US, to shield it from legal action while enticing U.S. customers to trade on its larger, unregulated international exchange. Furthermore, the SEC said Binance secretly sent billions of dollars from investors to a separate company owned by Binance CEO Changpeng Zhao. Binance said Monday it was trying to reach a settlement with regulators. Investors pulled hundreds of millions of dollars out of both trading platforms after the lawsuits were announced. 

Currencies vs. Securities: The SEC’s lawsuits treat several digital tokens traded on the platforms — not including popular cryptocurrencies like Bitcoin and Ethereum — as unregistered financial securities. SEC chair Gary Gensler told CNBC (Center bias) that the platforms were “commingling a number of functions,” adding, “We don’t see the New York Stock Exchange operating a hedge fund.”

How the Media Covered It: Most news coverage came from business and tech outlets rated Center and Lean Left; some major outlets on the right used wire service from AP (Lean Left bias) and others. Content itself was generally similar and nonpartisan.

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