The crackdown initiated by the U.S. Securities and Exchange Commission (SEC) may affect Binance in other regions and its license application in Hong Kong, according to a crypto-compliance lawyer. The expert believes the regulator wants the largest digital asset exchange to leave the United States.
U.S. SEC Crackdown on Binance Is Different, Legal Expert Says
“SEC’s attitude towards Binance is different from USDT,” Hong Kong-licensed lawyer Gilbert Ng has been quoted as saying by Chinese crypto blogger and journalist Colin Wu, also known by his Twitter handle ‘Wu Blockchain.’
The compliance specialist is convinced that the U.S. securities regulator wants “to require Binance to leave the United States completely.” This, Ng says, may affect the coin trading platform in other regions and its license application in Hong Kong.
Hong Kong licensed lawyer Gilbert NG explained the impact of the US SEC’s actions on HK
1. SEC’s attitude towards Binance is different from USDT. The attitude is to require Binance to leave the United States completely, which may affect Binance in other regions (For example,…
— Wu Blockchain (@WuBlockchain) June 7, 2023
This week, the SEC sued Binance, the world’s largest crypto exchange by trading volume, and sought court approval to freeze crypto assets controlled by its U.S. subsidiary. It claims that several of the tokens listed on Binance are unregistered securities.
The SEC also accuses Binance of violating registration-related provisions of U.S. securities laws with the unregistered offer and sale of its own crypto assets, including the BNB token and the Binance USD (BUSD) stablecoin. Unlike major stablecoins like tether (USDT), BUSD offers holders some advantages when using the Binance platform.
Gilbert Ng also pointed out that the U.S. does not have laws and regulations on cryptocurrencies while it needs to enforce the existing legislation. This creates uncertainty in terms of supervision while Hong Kong already has a clear framework, he explained according to Wu Blockchain’s tweets on Wednesday.
What’s more, Hong Kong has a different definition of securities, the lawyer noted. Some coins may be deemed security tokens in the United States, but not in Hong Kong. Currently, Hong Kong allows only professional investors to purchase security tokens.
On June 1, authorities in China’s special administrative region started accepting license applications from virtual asset providers such as crypto exchanges. The licenses will allow them to provide services to retail investors in Hong Kong, including trading of cryptocurrencies like bitcoin and ether.
Do you think the SEC crackdown in the U.S. will influence the regulatory environment in other jurisdictions? Share your thoughts on the subject in the comments section below.