Defend Truth


Binance – the Donald Trump of crypto


Shapshak is editor-in-chief of and executive director of Scrolla.Africa

Watching Binance fumble its South African launch is like watching former US president Donald Trump deny he never returned his top-secret homework.

Talk about not reading the room. A week after Binance.US was charged for “blatant disregard” of US securities laws, its local office is inviting journalists to “discover the world of Binance”. 

On the same day, I was invited to “an evening of discovery as we showcase the blockchain ecosystem, Binance” –  a PR firm sent me an email titled, “Myth: Crypto is a Ponzi scheme.” 

It was from a “senior conversation architect” and starts, “In our Crypto Myths – Debunked! series, we take the most common misconceptions and show them for what they really are. It is an important part of our efforts to promote crypto literacy and shake off the stigma of one of recent history’s biggest innovations.” Only at the end of the email does it show that this is actually on behalf of  Binance.

You might recognise the headline of the email – it’s the “sponsored content” Binance is running on Daily Maverick and many other websites. It’s a propaganda campaign aimed at the media and high-end publication readers pushed out on multiple channels.

Sounds a little dodgy, like the Security and Exchange Commission (SEC) questioning why Binance moved “large amounts of money” totalling $70-billion through the shuttered Silvergate Bank and Signature Banks from 2019 to 2023.

This month the SEC sued Binance and its co-founder Changpeng Zhao (known by his initials CZ) and its subsidiary Binance.US for “blatant disregard” of securities laws.

“Through 13 charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law,” said SEC chair Gary Gensler. 

“They attempted to evade US securities laws by announcing sham controls that they disregarded behind the scenes so they could keep high-value US customers on their platforms.”

In essence, the authority says Binance flouted securities laws because it failed to register with the SEC and “subverted their own controls to secretly allow high-value US customers” to use its international crypto exchange.

“Zhao and Binance secretly controlled the Binance.US platform’s operations behind the scenes,” the SEC said.

And the money that flowed through the two defunct banks was huge.

“At times, the amounts being credited and debited during a single month amounts to movement of more than a billion dollars,” the SEC’s filing said. 

“For example, in July 2021, one Signature Bank Binance Holdings account shows a starting balance of $468-million, deposits of $1-billion, withdrawals of $1.3-billion, and an ending balance of $179-million.”

So, no, I am not going to attend Binance’s event to “learn about our mission to revolutionise the crypto industry”. If this is the revolution, we don’t need it or want it.

I’m sure the millions of so-called retail investors who believed the crypto hype and invested their savings in exchanges like FTX, only to see them wiped out, would agree. Crypto enthusiasts resisted regulation and oversight by the SEC, only for the agency’s dire predictions to come true. 

Watching Binance fumble its South African launch is like watching former US president Donald Trump deny he never returned his top-secret homework. All teachers can tell when kids are lying when they get caught out. Trump’s strategy, copied by so many, is to double down and pretend the real issues aren’t real. Binance is doing something similar. 

On the face of it, the SEC seems to have a pretty solid case. Why would any person hand over their money – or crypto – to a company currently being sued by the US authorities for not following the very clear rules of investments? DM

Binance has provided the following response:

  1. Binance launch: Binance launched in South Africa a while back. In fact, we relaunched our futures products last year in South Africa via a partnership with Fivewest OTC Desk (PTY) LTD, the country’s leading fintech service provider for trading pairs.
    1. Unfortunately, a lot of misinformation has been spread about our company and we look forward to correcting the record through such events and engagements.
    2. Tomorrow’s Joburg event isn’t a launch event. It’s one of many media/community events we are hosting in South Africa, as a means of education on the Binance business ecosystem and demystifying any myths.
  2. and Binance.US: They are separate legal entities. Binance.US operates as an entirely independent entity from and is licensed to do business in several states in the United States.  Binance.US has its CEO, its executive team as well as corporate teams such as compliance, legal and finance.
  3. Binance Compliance and Regulation: Binance is committed to complying with existing regulations and participating in the creation of new regulatory frameworks that enable financial innovation while protecting users are Binance’s top priorities
    1. In SA, South Africa’s Reserve Bank announced that it will regulate cryptocurrencies as financial assets and new laws are expected over the next few months. We welcome the recent step by the SARB and hope it serves as a foundation for ushering in a safer and more secure future for crypto enthusiasts in the country.
    2. Around the world, we are in the process of obtaining crypto-specific licenses and have already secured multiple permissions globally – in Spain, Italy, France, New Zealand, Dubai, Bahrain, Abu Dhabi and many other jurisdictions – more than any other exchange.
    3. Binance’s commitment to working with local regulators in South Africa was strengthened by the news of obtaining approval for the partnership with Fivewest, having launched in the market with local fiat capabilities through its partnership with Stitch.
    4. As a globally regulated exchange, we receive queries from officials in jurisdictions in which we operate regularly and we always respond in an attempt to both explain our business operations and cooperate with our regulators.
  4. US SEC ruling: Binance.US  provided an update on their current situation with the SEC, which you might find interesting (summarized below, but I encourage you to read the full post).
    1. Binance.US are pleased that the Court did not grant the SEC’s request for a TRO and freeze of assets on their platform, which was clearly unjustified by both the facts and the law.
    2. Instead, they were able to reach a Court-ordered agreement with the SEC that allows them to continue their ordinary course business. There has never been any evidence presented by the SEC concerning misuse of customer assets. In fact, the SEC lawyers conceded in Court earlier this week, when asked by the Judge, that they had no evidence suggesting that any such thing had occurred.
    3. The SEC’s request would have effectively shuttered their business, which is consistent with the agency’s continued attempts to kill the crypto industry by any means, even by making allegations that are not supported by the fact.



Comments - Please in order to comment.

  • Stephen Lythgoe says:

    Thank you so much for this article. Having read the Binance advertising on the website – it’s great to have something that evaluates crypto for what it is.- who could have predicted that an asset with no intrinsic value could become worthless

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