- In the ongoing legal dispute between the United States Securities and Exchange Commission (SEC) and Binance, both parties have reached an agreement as directed by the US court.
- Notably, this agreement allows Binance to avoid having its assets frozen and enables it to continue serving its customers in the United States.
In the ongoing legal dispute between the United States Securities and Exchange Commission (SEC) and Binance, both parties have reached an agreement as directed by the US court. Notably, this agreement allows Binance to avoid having its assets frozen and enables it to continue serving its customers in the United States.
The agreement between the SEC and Binance is a result of a court order issued by Judge Amy Berman Jackson last week. The judge had instructed both parties to collaborate in response to the SEC’s urgent request to freeze the assets of Binance’s US subsidiary. Initially, the SEC had sought a court order to freeze the funds, arguing that it was necessary to prevent the assets from being moved out of the court’s jurisdiction and to protect its ability to impose remedies such as disgorgement, prejudgment interest, and civil penalties.
However, Judge Jackson recognized last week that such a freeze would severely impact Binance’s business in the US and would give the SEC a significant advantage in its lawsuit against the company. In order to avoid this outcome, she requested both sides to come to a compromise. In response, the SEC announced that it had reached an agreement to bring back the assets of Binance’s US customers to the United States.
Additionally, Binance and its related entities are prohibited from using corporate assets except in the normal course of business. Binance’s CEO, Changpeng Zhao (CZ), is also named as a party to the agreement, which is in the form of a consent order.
Interestingly, both parties are satisfied with the outcome of this mutual settlement, despite their contrasting perspectives. The SEC portrays the agreement as a victory, preventing Binance from misappropriating customer funds, while Binance considers it a triumph, stating that the SEC has failed in its attempt to shut down the US exchange.
In an official statement, Binance US emphasizes that the SEC has not presented any evidence of customer asset misuse. Instead, the company interprets the SEC’s legal actions as an effort to harm its business using any available means. As stated by Binance US,
The SEC’s request would have effectively shuttered our 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 facts.
Significantly, this is just one of several legal battles that Binance is currently facing in its ongoing dispute with the SEC. On June 5th, the SEC initiated a lawsuit against Binance. According to reports, the SEC has filed 13 charges against the exchange, including allegations of unregistered sales and offerings of stablecoins (BNB and BUSD), as well as various services such as Simple Earn, BNB vault products, and the staking program. Additionally, the regulator asserts that Binance failed to register its online platform as an exchange or a broker-dealer clearing agency.
Furthermore, the SEC claims that Binance’s entities, “BAM Trading and BAM Management,” deceived equity, retail, and institutional investors by providing false information about surveillance and controls to prevent manipulative trading on the platform, which were practically nonexistent. As a result, the SEC sought to freeze the assets of Binance U.S., although the motion did not succeed, leading the exchange to delist certain trading pairs and suspend USD services.
Nonetheless, the settlement agreement between the SEC and Binance brings considerable relief to investors who were concerned about the safety of their funds. However, as the case progresses, investors can expect to gain a better understanding of the security of their assets.
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