After suing crypto exchanges Binance and Coinbase, SEC fines JPMorgan for $4 million

• The Securities and Exchange Commission penalized JPMorgan Chase for accidentally deleting 47 million emails.
• The emails contained mostly business records that the bank was mandated under SEC rules to keep for at least three years.
• SEC is already taking the flak for its crackdown in the crypto space, with Binance even alleging the agency misled a court.

The Securities and Exchange Commission (SEC) has been a key member of the crypto space over the last couple of months. Primarily the prominence in this space is thanks to its barrage of lawsuits and charges against multiple companies. However, the regulatory body decided to go after a US bank today.

SEC penalized JPMorgan Chase

JPMorgan Chase, known to be the largest bank in the United States, fell victim to the SEC's crackdown. The bank on Thursday received a $4 million fine from the regulatory agency for accidentally and permanently deleting nearly 47 million emails. These emails belonged to the retail banking group, and most of them were known to contain business records.

As per the SEC guidelines, JPMorgan is mandated to keep such records for a period of at least three years before being discarded. However, the emails that dated from January 1 to April 23, 2018, were erased in 2019 from 8,700 mailboxes.

JPMorgan, too, did not deny or admit to any wrongdoing, noting that the incident took place accidentally. The bank decided to adopt its own email coding procedure in order to prevent such an occurrence in the future following the civil settlement.

According to the SEC, the bank had been attempting to unsuccessfully delete some of its communications from the 1970s and 80s for a while now. However, failing to do so led to the bank reaching out to an outside vendor that was managing JPMorgan's email storage, which by mistake, ended up deleting the emails in 2019.

SEC and Crypto

The SEC has been rigidly targeting securities-law violators for a while now, more commonly in the crypto space than the TradFi market. The most recent crackdown was faced by the two biggest cryptocurrency exchanges in the world - Binance and Coinbase.

Binance, however, fired back recently, alleging the regulatory body misled the court by providing contradictory statements after the SEC claimed Binance and its CEO Changpeng Zhao could "commingle customer assets or divert customer assets as they please."

Binance stated,

"SEC's statement that Defendants have been 'able to commingle customer assets or divert customer assets as they please' is directly contradicted by the SEC's statements to the court that the SEC has no evidence of that ever occurring."

The motion follows on from a consent order between the SEC and Binance.US regarding the handling of customer assets, according to a report on BSC News. In a subsequent press release, the SEC stated they had obtained “emergency relief” to safeguard Binance customer funds.

Binance claims the SEC overstated the situation and flagrantly misrepresented the facts, however. Later the SEC had to admit it had no evidence to suggest client assets had been at risk.