Binance.US, the American branch of the global cryptocurrency exchange Binance, has recently hired a former SEC enforcement official as part of its legal team. George Canellos, who served as the co-director of the SEC’s enforcement division from 2012 to 2014, is one of four lawyers from the international law firm Milbank LLP who will represent Binance.US in its ongoing lawsuit with the SEC.
The SEC sued Binance.US, along with Binance and its founder Changpeng Zhao, on June 5 for allegedly operating an unregistered securities exchange in violation of US laws. The SEC also filed an emergency motion to freeze Binance.US’s assets and prevent it from transferring funds abroad. Binance.US has denied the allegations and challenged the SEC’s motion, arguing that it would effectively shut down its business and harm its customers.
Canellos is a seasoned litigator with extensive experience in both civil and criminal cases involving securities fraud, insider trading, money laundering, cybercrime, and other complex matters. He has previously supervised more than 1,300 attorneys at the SEC and led major investigations against prominent figures such as Raj Rajaratnam and SAC Capital. He has also served as a federal prosecutor in New York and as a senior adviser to former SEC chair Mary Jo White.
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His expertise and reputation are expected to give Binance and CZ a strong advantage in their fight against the SEC. According to John Reed Stark, a former head of the SEC’s Office of Internet Enforcement, Canellos’ hiring indicates that Binance and CZ are preparing for a criminal prosecution. Stark tweeted: “Binance/DOJ Newsflash: Binance and CZ just added a uniquely qualified criminal defense all-star lawyer to their legal team: George Canellos, former Chief of the Major Crimes Unit in the U.S. Attorney’s Office for the Southern District of New York and former head of the SEC’s New…”
However, Stark also noted that Binance and CZ still face an uphill task in their defense against the federal regulators, who have accused them of “blatant disregard” of US securities laws and mishandling customer funds. He added: “…But I doubt even Ironman, Captain America, and the Hulk could get Binance out from their current perilous legal quagmire.”
Binance and CZ have denied the SEC’s allegations and have vowed to cooperate with the authorities. They have also hired other former SEC officials as part of their legal team, such as Richard Grime, a former assistant director of the SEC’s enforcement division.
Binance is the largest cryptocurrency exchange by trading volume in the world, but it has faced increasing scrutiny and regulatory pressure from various jurisdictions, including the UK, Japan, Germany, Hong Kong, Singapore, and Canada. The SEC’s lawsuit is one of the most serious challenges that Binance and CZ have ever faced, and it could have significant implications for the future of the crypto industry.
Binance.US’s decision to hire Canellos and his colleagues from Milbank LLP signals its intention to mount a vigorous defense against the SEC’s charges. Canellos is widely respected in the legal community for his expertise and integrity, and his involvement may help Binance.US negotiate a favorable settlement or outcome with the SEC. However, he may also face a formidable opponent in Gary Gensler, the current SEC chair who is known for his tough stance on crypto regulation.
Binance.US is not the only crypto platform facing scrutiny from the SEC. The agency has also sued Coinbase, another leading US-based exchange, for allegedly offering unregistered securities products to its customers. The SEC’s actions have sparked criticism from some lawmakers and industry leaders who accuse the agency of overreaching its authority and stifling innovation in the crypto space.
Binance.US has denied the SEC’s allegations and argued that its proposed remedies would effectively shut down its business and harm its customers. The exchange also claimed that the SEC’s actions were “extremely aggressive and intimidating” and that it had been cooperating with regulators. Binance.US said it would continue to operate as an all-crypto exchange until it can resolve its issues with its payment and banking partners, which have signaled their intent to pause support for its dollar channels.