Echoing Winston Churchill, "This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning." A version of a Cold War may now be looming in the cryptoverse as the US Securities and Exchange Commission (SEC) launches a direct assault against cryptocurrency exchange service, Binance.

Amid escalating tensions between the traditional financial world and the ever-evolving realm of digital money, the SEC has made a dramatic move by filing a complaint against Binance. This decision seems to represent a significant tactical shift in the regulatory war against cryptocurrencies.

While some might consider this move to be inevitable, the manner in which the SEC has filed its complaint is disappointing. Binance, being a leader in the crypto industry, has been cooperative since the commencement of the investigation and has made efforts to respond to queries and address concerns. Yet despite their good-faith approach, the SEC has chosen to act unilaterally and decided to proceed to litigation.

This assault not only puts Binance on the defensive, but it also casts doubt on America's role as a global hub for financial innovation. Digital asset laws are largely undeveloped in many parts of the world, and regulation by enforcement may not be the best path forward. An effective regulatory framework calls for collaborative, transparent, and thoughtful policy engagement – a path now forsaken by the SEC.

Below, you can find the official statement from Binance regarding the SEC complaint:

SEC Complaint Aims to Unilaterally Define Crypto Market Structure

2023-06-05

We are disappointed that the U.S. Securities and Exchange Commission chose to file a complaint today against Binance seeking, among other remedies, purported emergency relief.  From the start, we have actively cooperated with the SEC’s investigations and have worked hard to answer their questions and address their concerns.  Most recently, we have engaged in extensive good-faith discussions to reach a negotiated settlement to resolve their investigations.  But despite our efforts, with its complaint today the SEC abandoned that process and instead chose to act unilaterally and litigate.  We are disheartened by that choice.

While we take the SEC’s allegations seriously, they should not be the subject of an SEC enforcement action, let alone on an emergency basis. We intend to defend our platform vigorously.  Unfortunately, the SEC’s refusal to productively engage with us is just another example of the Commission’s misguided and conscious refusal to provide much-needed clarity and guidance to the digital asset industry.

Today’s action is another in a line of examples where, as with other crypto projects facing similar suits, the Commission has determined to regulate with the blunt weapons of enforcement and litigation rather than the thoughtful, nuanced approach demanded by this dynamic and complex technology. Unilaterally labeling certain tokens and services as securities – even ones over which other U.S. authorities have asserted jurisdiction – only compounds these problems.

Perhaps most surprising, the SEC’s actions undermine America’s role as a global hub for financial innovation and leadership.  Digital asset laws remain largely undeveloped in much of the world, and regulation by enforcement is not the best path forward.  An effective regulatory framework demands collaborative, transparent, and thoughtful policy engagement – a path the SEC has abandoned.

And, to be clear: any allegations that user assets on the Binance.US platform have ever been at risk are simply wrong, and there is zero justification for the Staff’s action in light of the ample time the Staff has had to conduct their investigation.  All user assets on Binance and Binance affiliate platforms, including Binance.US, are safe and secure, and we will vigorously defend against any allegations to the contrary.  Rather, the SEC’s actions here appear to be in service of an effort to rush to claim jurisdictional ground from other regulators – and investors do not appear to be the SEC’s priority.  Because of our size and global name recognition, Binance is an easy target now caught in the middle of a U.S. regulatory tug-of-war.

It seems based on these developments that the SEC’s goal here was never to protect investors; if that were truly the case, the Staff would have thoughtfully engaged with us on the facts and in our efforts to demonstrate the safety and security of the Binance.US platform.  The SEC’s real intent here, instead, appears to be to make headlines.

We will continue to cooperate with regulators and policymakers in the U.S. and across the globe because that is the right thing to do.  And Binance remains committed to productive engagement to ensure the next generation of cryptocurrency regulation fosters innovation while implementing and ensuring important consumer protections. Because Binance is not a U.S. exchange, the SEC’s actions are limited in reach.  Still, we stand with digital asset market participants in the U.S. in opposition to the SEC’s latest overreach, and we are prepared to fight it to the full extent of the law.

We will work alongside industry partners to defend this important technology from misguided lawsuits.  And we will maintain our unceasing efforts to deliver a safe and trusted platform for our users that holds true to our core value of furthering the freedom of money.