Binance.US calls SEC's motion and lawsuit "unwarranted."
In an urgent judicial move, on June 6th, the US Securities and Exchange Commission (SEC) sought a temporary restraining order against cryptocurrency exchange giants Binance, Binance.US, and their CEO, Changpeng Zhao (CZ).
The SEC's emergency motion primarily targets the safeguarding of US customer assets. It mandates the immediate freeze of Binance.US's holdings and seeks to repatriate both cryptocurrency and fiat held by, or on behalf of, US clients.
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Furthermore, the motion requests a ban on record tampering and imposes additional terms on the discovery process. The SEC's document states:
This relief is necessary on an expedited basis to ensure the safety of customer assets and prevent the dissipation of available assets for any judgment, given the Defendants’ years of violative conduct, disregard of the laws of the United States, evasion of regulatory oversight, and open questions about various financial transfers and the custody and control of Customer Assets.
The proposed order specifies the return of US customer assets to Binance.US within 10 days. It also mandates a shift of all customer crypto assets to new wallets with fresh private keys under the control of US-based BAM Trading personnel.
It's important to note that the SEC's emergency motion is not anticipated to directly affect customers' ability to withdraw funds and still needs approval from a district judge to proceed.
This move closely follows an SEC lawsuit filed against Binance alleging securities law violations.
In response to the SEC's drastic actions, Binance.US sought to reassure its user base. They asserted via a June 6th tweet that "user assets remain safe and secure."
Additionally, the company maintained that its platform functions normally, with regular deposit and withdrawal operations continuing uninterrupted.
Binance.US criticized the SEC's injunction as "unwarranted," suggesting that it is a strategic litigation maneuver rather than a genuine concern for customer asset safety. Binance.US stated:
The filing of the preliminary injunction is unwarranted and based more on the SEC Staff obtaining an advantage in litigation versus genuine concern about the safety of customer assets.
Despite Binance.US's efforts to reassure the SEC of their customer assets' security, the regulator has chosen to proceed with their motion. Binance.US expressed disappointment with the SEC's actions, but they stand ready to defend themselves in court.