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“Asset freeze is unnecessary and unjust”
Binance US, the US version of the major cryptocurrency exchange Binance, filed documents in a lawsuit with the U.S. Securities and Exchange Commission (SEC) on the 12th, refuting the SEC’s allegations.
It argued that the SEC’s request to freeze Binance US assets was unjustified, while at the same time refuting the SEC’s allegations that Binance US did not segregate customer assets.
First, Binance.US alleges that the SEC’s request to the court to freeze the assets of its operating companies is “unnecessary and unreasonable.”
Binance and its CEO, Changpong Zhao (CZ), said that Binance US Operating Company (BAM Trading Services: BAM) is prohibited from transferring any assets to affiliates. Binance also said it had proposed to the SEC that BAM would continue to have exclusive ownership and control over customer assets and preserve related documents.
But the SEC continued to reject the proposal, citing unclear “risks” to customer assets. Binance US has stated that the asset freeze measures are rather detrimental to customer assets.
The SEC’s proposed action would effectively end BAM’s business. The SEC is seeking unfairly burdensome and coercive measures to freeze all business operations of Binance US.
Such actions would primarily harm BAM’s customers, effectively put BAM out of business, and also prevent BAM from defending itself in this lawsuit.
Freezing the operating company’s funds would make it impossible to pay employees and vendors, making the platform unsustainable. He also pointed out that it is highly likely that partner banks will also refuse to respond to requests for funds transfers, including the redemption of customer assets.
Due to the SEC lawsuit against Binance, Binance US’ bank partners have already notified the company of suspending US dollar remittance routes.
connection: Binance US Suspends US Dollar Deposits and Withdrawals, Focusing on Stablecoin Denominated Trading Services
What is SEC
Established in 1934. Its purpose is to ensure fair trading and investor protection, and prevent insider trading, corporate fraudulent accounting, and market manipulation. It also determines whether virtual currency falls under the category of securities. SEC stands for “Securities and Exchange Commission”, and in Japan the “Securities and Exchanges Surveillance Commission” plays a similar role.
Cryptocurrency Glossary
Separation of assets
In addition, Binance US has refuted the SEC’s allegations that the company did not segregate customer assets.
A lawyer for Binance US’s operator, BAM, responded that the company “stores its customers’ fiat currency in segregated accounts managed with banking partners, segregated from any other company’s funds.” ing.
Binance US confirmed that Mr. CZ is the owner of BAM’s bank account, but claimed that Mr. CZ does not have signing authority for the account.
By way of background, the SEC claims that Mr. CZ is one of the people controlling BAM’s bank accounts. He argued that this was proof that there was no segregation of assets between Binance and Binance US.
The SEC hearing on the Binance US asset freeze request is set to take place on the 13th.
connectionUS SEC calls for freeze of Binance US assets
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