The move comes as the exchange faces allegations of operating as an unregistered securities exchange. Canellos, who currently works at the international law firm Milbank LLP, previously served in various leadership positions at the SEC before leaving in 2014.
Bloomberg reported that Binance.US has hired Canellos, along with three other lawyers, to bolster its defense against the SEC's lawsuit. The SEC has accused the exchange of failing to register as an exchange, broker, and clearing agency. Similar allegations were made against global exchange Binance and Coinbase in subsequent filings. In an attempt to freeze the assets of the U.S. exchange, the SEC sought a temporary restraining order.
Former SEC internet enforcement chief John Reed Stark noted on Twitter that Binance is likely preparing for a criminal prosecution and taking steps to secure the best defense attorneys. Stark mentioned that the seriousness of the fraud alleged by the Commodity Futures Trading Commission (CFTC) and SEC could result in the Department of Justice seeking prison time for individuals convicted of Binance-related crimes.
Binance.US responded to the SEC's court petition to freeze its assets by filing a motion urging the court to deny the SEC's request. The exchange argued that the proposed remedies by the SEC would effectively put an end to its business. The SEC's actions prompted Binance.US to suspend U.S. dollar deposits and potentially pause fiat withdrawals, citing the SEC's "extremely aggressive and intimidating tactics" as the reason for the decision.
The SEC's approach to cryptocurrency enforcement has drawn criticism from U.S. lawmakers and industry leaders who perceive it as heavy-handed. Representative Warren Davidson introduced a bill aimed at restructuring the commission, calling for the removal of SEC chair Gary Gensler. The bill seeks to address concerns over the SEC's regulatory stance and potentially bring about changes in its enforcement practices.
In summary, former SEC enforcement co-director George Canellos has joined the legal team of Binance.US as the exchange faces allegations of operating as an unregistered securities exchange. The exchange has been sued by the SEC, and Canellos' addition to the legal team indicates the exchange's preparation for potential legal proceedings. Binance.US has argued against the SEC's proposed remedies and criticized the regulator's tactics. The SEC's actions have drawn criticism from U.S. lawmakers and industry leaders, prompting calls for the restructuring of the commission.
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