Binance motion against the SEC could instigate criminal prosecution, expert says

John Reed Stark, former attorney at the Securities and Exchange Commission’s (SEC) enforcement division, said Friday that Binance’s legal motion against the SEC regarding “misleading” statements from the US financial regulator is a bad idea because it is likely to lay the ground for criminal prosecution.

Stark, who shared his views on the matter via Twitter, argues that the SEC’s attorney’s allegations and statements likely reflect information that the regulator has gathered from informants, whistleblowers and criminal investigation agencies. In Stark’s words, Binance is “poking the bear” and asking for the unsealing of criminal charges related to the exchange and/or its executives.

Using litigation as marketing theater is never recommended when there exists a criminal indictment that is being contemplated or is already filed under seal, which is, IMHO, exactly the situation with Binance

 Stark said.

Also read: SEC vs Binance update: Judge attempts to broker a compromise

Binance rebuts SEC’s restraining order

The largest exchange by volume filed a motion asking Judge Amy Berman Jackson to prevent SEC attorneys from making public statements alleging Binance and CEO Changpeng Zhao’s mishandling of US-based customer assets.

Binance argues evidence of these allegations has not been presented yet and these statements are likely to “taint” the jury pool. The document is shared here.

Binance’s motion could benefit  the exchange’s customers and users holding funds on the exchange, or holders of native token BNB, as it reduces Fear, Uncertainty and Doubt (FUD). However, it is likely to result in an unsealing or filing of criminal indictment, likely being contemplated or already filed under seal, according to Stark.

The former SEC enforcement division attorney said statements made by the regulator's attorneys leave room for speculation that the agency is working with informants, whistleblowers or international law enforcement.

The stark reality is that Binance’s motion is provocative and Binance’s antagonistic, arrogant, accusatory and unorthodox ethics battle-cry could fan the flames of whatever Binance-related criminal prosecution is cooking and instigate criminal prosecutors to act now against Binance

he said.

BNB price declined by 2% since Thursday’s open of $248.9. At the time of writing, the native token of the exchange trades at $242.8.

Binance US didn’t immediately respond to a request for comment.