SEC and Binance US Agree to Avoid Asset Freeze

10 months ago 40

Binance US Asset Freeze Avoided

The U.S. Securities and Exchange Commission (SEC) and Binance.US, the U.S. arm of major cryptocurrency exchange Binance, have agreed to avoid freezing Binance.US assets. District Judge Amy Berman Jackson also approved the agreement.

The deal includes the repatriation of Binance Holdings, Binance US Operating Company (BAM) Trading Services (BAM) and other companies to the US, as well as Binance US client assets held in custody by Binance CEO Changpong Zhao (CZ). is also included.

It also charges BAM to keep US client assets in the US and process client withdrawals during the trial of the SEC’s lawsuit against Binance. Other items included:

BAM is prohibited from transferring assets or funds to affiliated companies such as Binance Holdings and Mr. CZ
Restricts BAM from disbursing funds, except for normal business expenses. SEC Oversight of BAM Expenditures
Prohibit Binance from destroying records
Require disclosure to the SEC regarding the custody and security of customer assets

The SEC initially sought to freeze Binance.US assets, but Binance said the request was “unnecessary and unreasonable,” effectively ending Binance.US’ business and putting client assets at risk. rice field.

Discussions between the SEC and Binance have since centered around this request. This time, the asset freeze seems to have been avoided.

connection: US SEC and Binance US start talks over asset freeze

SEC and Binance in conflict

Gurbil Grewal, Director of the SEC’s Enforcement Division, commented:

We will pursue the wrongdoings alleged in the SEC lawsuit and hold Binance and its CEO accountable for securities law violations and more. Meanwhile, it has ensured that US customers can withdraw their assets from the Binance platform.

The SEC alleges that CZ and Binance Global had custody of Binance US’s customer assets and were able to divert them at will. Grewal reiterated this claim, adding that the prohibitions imposed on Binance in the agreement are necessary to protect investor assets.

Meanwhile, Binance is refuting the SEC’s allegations that Binance US did not segregate customer assets.

connection: Binance US refutes SEC allegations, filing court documents

Binance US issued a statement on the deal, arguing that the court did not grant the SEC’s freeze request, which was “clearly unjustified both in fact and law.”

We want to provide an update on the current battle https://t.co/AZwoBOh0gq finds itself in with the SEC. We are pleased to inform you that the Court did not grant the SEC’s request for a TRO and freeze of assets on our platform which was clearly unjustified by both the facts and…

—Binance.US (@BinanceUS) June 17, 2023

By court order, we were able to reach an agreement with the SEC that allowed us to continue our normal business operations.

To date, the SEC has not provided evidence of misappropriation of customer assets. In fact, SEC attorneys acknowledged in court earlier this week, in response to a judge’s question, that there was no evidence to suggest that any misappropriation of assets occurred.

Binance US also claimed that “the SEC is trying to take down the cryptocurrency industry by any means possible”.

He added that while the SEC lawsuit has damaged Binance’s business and reputation, it remains determined to defend itself against false accusations and the SEC’s tactic of “regulation by enforcement.”

What is SEC

Established in 1934. Its purpose is to ensure fair trading and investor protection, and to 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