As markets, customers and industry observers continue to dissect the U.S. Securities and Exchange Commission’s (SEC) extensive lawsuit against cryptocurrency giant Binance and its affiliates, surprising new details are constantly coming to light.
One of the unexpected revelations hidden in the 136-page complaint is that Binance.US. had a significant relationship with Alameda Research through its over-the-counter trading desk.
Tucked away on page 55, this detail exposes a previously hidden link between two major entities in the cryptocurrency world, adding another layer of intrigue to the legal battle.
The SEC makes a single reference this week to Alameda Research on page 55, stating that the company was often the sole counterparty to Binance.US’s OTC trades between May 2020 and February 2022.
While this disclosure does not directly implicate Alameda Research or its CEO, Sam Bankman-Fried, in any wrongdoing related to the Binance lawsuit, its inclusion in the complaint against Binance and its affiliates is unlikely to be accidental or immaterial.
The inclusion of Alameda Research in the complaint is especially noteworthy given the company’s existing legal troubles. Alameda, the sister company of cryptocurrency exchange FTX, has come under scrutiny in recent months. Its CEO, Caroline Ellison, has already pleaded guilty to charges including conspiracy to commit wire fraud and securities fraud. Bankman-Fried is currently awaiting trial.
The SEC filing reveals that Binance.US’s OTC desk saw more than $654 million in transactions in 2021 and primarily serves institutional traders for high volume crypto asset and fiat pair transactions. The report also details Alameda Research’s involvement as a frequent counterparty to these trades through the platform’s OTC Desk.
The inclusion of Alameda Research in the SEC’s complaint underlines the extent to which crypto companies and exchanges do business with each other. As authorities around the world step up their oversight of digital asset markets, the industry is under increasing pressure to improve compliance with financial regulations.
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