Tightening the Hold

As humans, we end up needing a lot of different skills in our lives. Now, while each skill commands its own unique importance, we must acknowledge that some actually boast a higher significance than others, and one notable skill that hails from the said pack is being able to recognize varying forces. You see, our lives are literally surrounded with forces of all kinds, hence understanding their nature on a granular level becomes a major problem. Such a dynamic might appear as somewhat inconsequential, but it’s actually not. In an event where you are interacting with, let’s say, a negative force, not having a deep understanding of it can really leave a lasting impact. To avoid these run-ins, the world has got dedicated regulatory bodies in through the door. With well-defined regulations running the show, we would effectively create a more structured spectrum. However, the overall success here cannot discount the roadblocks that we witnessed along the way. For instance, when technology rose to the fore, the ultimate control was somewhat snatched from the regulators. Blinded by the ingenious tech-driven escape tools, the governing forces were suddenly struggling big time, but we are, fortunately, looking at yet another change on the horizon, and this one might just tip the scales back into regulators’ favor. In fact, the same is pretty evident in an ongoing SEC investigation.

According to the Wall Street Journal, Securities and Exchange Commission is investigating the relationship between Binance’s US arm and two particular trading firms. The investigation is seemingly born from a concern, which talks to Binance not making adequate disclosures around affiliate traders due to its special interest in two affiliate market makers, Sigma Chain AG and Merit Peak Ltd. Market makers are basically used for constant buying and selling of assets, therefore bolstering liquidity and keeping price volatility in check. Sigma Chain AG and Merit Peak Ltd carry that exact responsibility for Binance.US by constantly trading crypto, but the problem is, as per certain corporate documents, Binance founder and CEO, Changpeng Zhao was actually a controlling stakeholder in both the firms up until late 2021. If the concern is found valid, it’ll be a big violation on Binance’s part.

While Binance.US is yet to give us a concrete comment on the report, the company’s spokesperson, Zachary Tindall did deliver some words of reassurance.

“Binance.US is committed to upholding the highest standards of compliance,” said the spokesperson.

At the moment, SEC is awaiting more information about Sigma Chain and Merit Peak from Binance.US before zeroing upon any enforcement action. The agency has penalized firms with similar disclosure failures in the past, but it will depend a lot on where the investigation goes over the next few days.

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