Binance, a prominent cryptocurrency exchange, files a lawsuit against the SEC, escalating the legal conflict and raising questions about the future of Binance’s US operations. Stay updated on the latest developments in this significant case.
The SEC and Binance lawsuit, according to the most recent cryptocurrency news: In addition to other news, Binance and Binance.US have filed a lawsuit in response to the SEC’s request to freeze all of Binance.US’s funds.
Binance, a cryptocurrency exchange, is suing the SEC in court
Definitely Binance.The stakes look to be quite high if the earliest reactions to the SEC’s complaint against US and Changpeng “CZ” Zhao are taken seriously.
But it won’t be until then that we’ll be able to see how the case is going and what the judge thinks of the arguments that have been put forward so far.
In related news, they are currently in Washington to cover the SEC hearing for a temporary restraining order against Binance.
In particular, Binance.US and Binance submitted their initial comments to the US Securities and Exchange Commission (SEC) on Monday, arguing that the regulator’s request for a temporary restraining order would prevent them from compensating staff, suppliers, and other stakeholders.
Additionally, the records outlined their response against the SEC’s genuine accusations.
Binance.US responded vehemently to the restraining order motion made by the SEC, warning that if it is approved, their operations might be shut down.
The SEC seeks unnecessary and unwarranted relief. Far from calling for relief that is ‘finely calibrated’ to ‘maintain the status quo’… ‘draconian’ restraining order.
During this time, US District Judge Amy Berman Jackson of the DC District Court issued an order ordering Binance and Binance.US to provide a summary of any discrepancies in the proposed terms by 1 PM ET (17:00 UTC), one hour prior to the hearing.
Additionally, he directed the SEC to outline the modifications it plans to make to Binance.US’s proposal in order for the organization to adopt it as an alternative to the suggested temporary restraining order.
The judge ruled that neither party may now make any new arguments or justifications.
The two parties were searching for a compromise
In a recent petition for a consent order, the US Securities and Exchange Commission (SEC) and BAM Trading, the US division of Binance, sought to amend some of the conditions of an earlier SEC request to freeze the company’s assets.
The proposed amended consent order would enable BAM Trading to fulfill financial commitments, such as employee payments and other responsibilities, and specifically tries to give the SEC more protections. According to the document:
BAM Trading and BAM Management may continue to make payments for the purchase of goods and services, salaries for BAM Trading and BAM Management staff, including pre-existing benefits, professional fees and other similar ordinary expenses for the operation of their businesses.
The primary provision allowing for the release of assets states that, under no circumstances, Binance may make payments or transfer assets to businesses or people working on its behalf.
Additionally, the ruling stipulates that Changpeng Zhao, CEO of Binance, is not permitted access to BAM Trading or Binance assets.US.
Following the SEC’s legal action against Binance and Zhao, the agency urgently requested that the assets of BAM Trading be frozen.
BAM Trading replied by submitting a motion in opposition, contending that the SEC’s justification for asking for the freeze does not satisfy the standard of proof necessary by the court.
The proposed consent order has not yet received judicial approval at this time. As a result, there appears to be a dispute over the specifics between the SEC and Binance, and the court has asked for more facts.
Attack from Binance on SEC: “The assault is on the crypto industry”
Binance Holdings and Zhao argued that no immediate action is required and that “there is no risk to the assets of Binance.US customers” in a joint paper submitted in support of the Binance.US application.
The SEC allegedly permitted Binance and Binance.US to operate since its start without taking any prior enforcement action, according to this filing, which was also made public on Monday.
Why did the SEC allow these platforms to grow to their current size if it was always illegal? And how could the sudden ’emergence’ coincide with the SEC’s assault on the cryptocurrency industry as a whole, with Binance and Coinbase being sued on consecutive days?
The filing also said that the SEC had not previously expressed any worries regarding the assets of Binance.US or Zhao and Binance’s access.
In fact, it was noted that the first instance of worry arose on May 30, 2023, a few days before to the subpoena being issued.
Additionally, the petition noted that the SEC’s accusations are related to control person concerns and registration violations rather than financial mismanagement.
The SEC had accused Binance of being a clearing agency or exchange, but Binance refuted these claims, claiming that it merely serves as a service provider for the US bitcoin trading platform known as Binance.US.