In a legal battle with the Securities and Exchange Commission (SEC), Binance.US, a cryptocurrency exchange, had called on a federal judge to dismiss the SEC’s request to freeze billions of dollars of assets. The exchange argued that such a freeze would have severe consequences, cripple its operations and negatively impact its customers.
In a court filing on Monday, Binance.US attorneys stated that without the ability to access its assets, the exchange would be unable to pay employees, vendors, suppliers, and professionals or maintain its trading platform. They further warned that a freeze on corporate assets would likely result in banking partners refusing to transfer funds for any purpose, including customer redemptions.
The SEC initiated the asset freeze request after suing Binance.US, its parent company Binance Holdings Ltd., and founder Changpeng Zhao. The regulatory body alleged that the entities had shown a “blatant disregard of US securities laws” and engaged in “years of violative conduct” that put customer funds at risk. Zhao also owns Binance.US.
In response, defense attorneys argued in their court filing that customer assets in the United States were secure, and there was no need for the extreme measures sought by the SEC. They asserted that the requested asset freeze was unnecessary.
The SEC filed a lawsuit on June 5 alleging various violations, including mishandling customer funds and deceiving investors and authorities. The SEC filed a sudden action request for a temporary restraining order to freeze Binance.US’s assets, including the return of investments held abroad, in order to protect customer funds. The SEC’s charges have been rejected by Binance.
In a significant blow to Binance.US, according to report,one of its banking partners has already notified the exchange that it will no longer hold its assets, effective June 14.
Furthermore, the partner froze all activity on Binance.US’s account until after the court rules on the SEC’s motion.
The SEC v. Binance case is being heard in the US District Court for the District of Columbia (Washington, DC). The court filing by Binance.US comes ahead of a hearing scheduled for today, presided over by Judge Amy Berman Jackson in Washington federal court.
