Binance.US Assets Freeze: Judge Urges SEC to Allow Binance to Operate in the U.S.
What did judge dais for Binance.US situation? | Credit: Shutterstock
- The SEC asked U.S. District Judge Amy Berman Jackson to issue a temporary restraining order that would have frozen Binance’s assets, but the judge rejected the motion.
- The magistrate judge was assigned to mediate between the two organizations so that client interests may be safeguarded without having to shut down the platform.
- BNB price increased by over 5% despite accusations of market manipulation from analysts in the crypto sector.
A temporary restraining order that would have frozen the assets of the trading platform Binance.US was not issued by a federal judge overseeing the U.S. Securities and Exchange Commission’s (SEC) action against Binance and Binance.US.
Judge Amy Berman Jackson of the D.C. District Court requested that the SEC continue talks with Binance.US about freezing assets ad other constraints so that the company might continue operating for the time being.
Binance Will Not Accept ‘Death Penalty
Binance.US sought the judge to deny the SEC’s attempt to freeze assets on the platform valued at billions of dollars. According to representatives of Binance.US, their major concern was to be allowed to incur typical operating costs.
The SEC filed a lawsuit against Binance.US, its international branch Binance, and CEO Changpeng Zhao last week, alleging they misappropriated client cash, intentionally deceived investors, and violated fundamental disclosure laws.
The judge appeared irritated by the responses during the hearing on Tuesday after asking if any monies from Binance were involved.
According to several SEC lawyers, the main concern for them was whether or not Binance’s worldwide platform had enough private key shards to transfer money.
In order to preserve customer cash without having to shut down the exchange, Berman Jackson directed the two businesses to a magistrate court.
Customer Funds Not at Stake
Binance.US, which is fighting the SEC’s suit and says customer assets are safe, argued during the hearing that blocking the flow of all funds would cripple its business and hurt customers.
“We are not willing to accept the death penalty eight days into our case,” one of the Binance.US lawyers told the judge.
The exchange must be able to pay for routine company expenses including rent, employee salaries, vendor payments, and software licensing, among others,” US lawyer said.
“The area that is giving us consternation is an asset freeze that will be misconstrued by banks,” he said.
Judge Jackson observed that until the two parties had resolved the issue with the magistrate, she would not make a final determination about the SEC’s motion for a temporary restraining order.
At the conclusion of business on June 15, there will be an update on the negotiations with the magistrate.
She also mentioned Binance.US and the SEC appeared “not that far apart” in their desire to resolve the issue.
Finding Common Ground
Former SEC enforcement lawyer John Read Stark tweeted to his 20,000 followers that there was “a lot of conflict between what each party” wanted to get out of the session before Judge Jackson made her judgment.
“That does not mean the judge cannot order a compromise and find common ground,” Stark stated.
The judge complied.
“Shutting it down completely would create significant consequences not only for the company but for the digital asset markets in general,” she said during the hearing.
The SEC’s approach comes as it intensifies its anti-crypto campaign with both Binance.US and Coinbase. The largest U.S. cryptocurrency trading platform, Coinbase, was the target of a second lawsuit filed by the agency the day after it sued Binance, accusing it of violating regulations governing the traditional investment sector by improperly failing to register.
Gensler Thinks That Safeguarding Investors Is Key
Since taking over the agency’s leadership two years ago, SEC Chairman Gary Gensler has issued numerous warnings about how the whole cryptocurrency business is functioning illegally and that a day of reckoning is soon to arrive.
When questioned once about whether a consumer-facing organization like the SEC actively tries to deter retail investors from investing in the cryptocurrency sector by delegitimizing crypto organizations, Gensler responded that his main duty is to safeguard investors.
Gensler then said : “I’m in a job where I’m supposed to be merit neutral in terms of what risk investors want to take, but not neutral towards the investor protection — the full, fair, and truthful disclosure you get when you’re investing in a security.”
After the collapse of former crypto trading behemoth FTX last October, those calls became more urgent as Gensler warned surviving companies they were “running out of runway” to register with the agency. He reaffirmed what has become a catchphrase for corporate CEOs defying regulation in a speech to an investment conference on Thursday: “Not liking the message isn’t the same as not receiving it.”
CZ Zhao Denies Alleged BNB Price Manipulation
The ‘@54kskew’ trade feed informed its 81,000 subscribers on June 13 that BTC was being liquidated for USDT reserves.
It claimed that these are “being pumped into BNB aggressively since 27th May”, and that the BNB was being sold for BUSD, which was “pumped into BTC to suppress downside volatility so BTC can be swapped out for USDT.”
“This is technically market manipulation, Binance is definitely up to something here to prevent BNB from crashing as well BTC.”
Changpeng Zhao answered back and stated that “Binance has not sold BTC or BNB. We even still have a bag of FTT.”
BNB prices were rising by 5.34% on the day to reach $249 at the time of writing.
