After reviewing its lawsuit against cryptocurrency giant Binance, financial news analyst Matt Levine said that "all [the SEC] could find is that Binance is running a crypto exchange."
Levine, a lawyer and former investment banker-turned journalist, made the comment in the June 6 edition of his Bloomberg 'Money Stuff' column.
“The SEC, and before it the [Commodity Futures Trading Commission], investigated Binance carefully and wrote a 136-page complaint about every bad thing it could find, and all it could find is that Binance is running a crypto exchange,” Levine said. “I am tempted to read yesterday’s lawsuit as kind of an endorsement of Binance by the SEC."
"For the most part the Binance complaint is the same as the Coinbase complaint: Binance is accused of operating a crypto exchange that was open to US customers and that listed crypto tokens that are securities, without registering as a U.S. securities exchange,” he said.
The SEC also sued cryptocurrency exchange Coinbase on June 6.
In a blog post, Binance said the company is "disappointed" in the SEC lawsuit, slammed the agency for its "refusal to productively engage" the company and said the action "is just another example of the Commission’s misguided and conscious refusal to provide much-needed clarity and guidance to the digital asset industry."
Coinbase CEO Brian Armstrong responded to the SEC lawsuit with a tweet, highlighting the fact that the SEC and CFTC "have made conflicting statements, and don't even agree on what is a security and what is a commodity." He emphasized the need for Congress to move forward with legislation that will establish regulatory certainty for the industry and criticized the SEC's "regulation by enforcement" approach.
Last year, Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) introduced the "Responsible Financial Innovation Act," which they said would create regulatory clarity for the cryptocurrency industry. The proposed bill, aiming to largely categorize digital assets as commodities, would assign regulatory authority over the digital asset spot market to the CFTC.
Levine was a U.S. Court of Appeals clerk and worked for Goldman Sachs.