• Regulators are warning US investors about Binance, which had ties to the now-defunct FTX.
• John Reed Stark, a former SEC attorney, has warned of a potential “epic bank run” at Binance.
• Elizabeth Warren and other lawmakers have questioned the legitimacy of Binance and its related entities.
Regulators and people in charge of America’s financial sector are warning that something bad could potentially happen with Binance, which as we all know, had strict ties to FTX when the company fell into oblivion.
John Reed Stark’s Warning
John Reed Stark – a former attorney for the Securities and Exchange Commission (SEC) – has warned in a recent interview that Binance could possibly see a heavy deposit run, which could wind up hurting investors like nothing ever has. He stated: „Binance is a shadow bank, minting their own counterfeit currency while providing limit-order books/ brokerage/ custody/ clearing/ settlement/ etc. with no U.S. regulatory oversight or audit.“
Elizabeth Warren’s Concerns
Not long ago, an investigation by Forbes led reporters to believe that there was a hole in the company’s finances that came close to $2 billion, though its founder and CEO Changpeng Zhao said this was misconstrued information and he dismissed the details. This wasn’t enough to convince lawmakers like Elizabeth Warren, the democrat senator from the state of Massachusetts who questioned the circumstances surrounding FTX were similar to the U.S. division of Binance and demanded answers from them in letter form: „Your companies‘ apparent attempts at evading the enforcement of anti-money laundering laws, securities laws… cast serious doubt on your commitment to your customers.“
FTX will likely go down as one of the biggest embarrassments to ever occur within crypto arena as customers withdrew more than $8 billion during it’s collapse time from binance causing some strict rigidity following those transactions
In conclusion regulators are warning US Investors about Binane due to its ties with FTX exchange which faced major collapse leading withdrawal of $8 billion cryptocurrencies form binance leadong concerns regarding money laundering activities by binance thus demanding answers form them