The recent Securities and Exchange Commission (SEC) enforcement action on leading cryptocurrency exchange Binance has taken its toll on the overall business of the company.
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Binance U.S. market share has seen a sharp decline compared to other exchanges. As of Sunday, June 18th, the market shares of Binance United States office had dropped to 4.35%, a far cry from more than 16% two months ago.
Binance Comes Under SEC Enforcement Action
It’s been two weeks since the SEC sued global leading digital asset service provider Binance, Binance U.S. and its Chief Executive Officer (CEO) Changpeng Zhao in the District Court of Columbia for operating unregistered U.S. financial companies, misleading investors, mishandling customers’ funds and flouting Know-Your-Customers (KYC) rules.
In the 136-page complaint, Binance commingled customers’ deposits and transferred them to an external entity managed by Zhao.
Although Binance did not admit or deny most of the claims, it has categorized the lawsuit as “part of a rushed effort to claim jurisdictional ground from other regulators — and investors do not appear to be the SEC’s priority.”
At the same time, the lawsuit has had an adverse effect on the exchange. Binance.US and the SEC are trying to strike a deal that could potentially protect the exchange’s assets from being completely frozen.
Judge Suggest External Settlement For Binance vs SEC
Therefore, the U.S. District court Amy Berman Jackson directed both entities to magistrate court to see how they can come to a consensus on protecting customers’ funds without shutting down the crypto exchange. Until the issue is resolved between the SEC and Binance U.S. at the magistrate court, Judge Jackson has declared that she would not be making a decision on the SEC’s request for a temporary restraining order.
“Shutting it down completely would create significant consequences not only for the company but for the digital asset markets in general,” the Judge said.
SEC Reach a Settlement With Binance U.S.
Binance U.S. and the SEC finally reached a settlement on Saturday, June 17th which states that the defendants shall repatriate to the United States, transfer to BAM Trading, and confirm that BAM Trading maintains possession, custody and control in the United States of all fiat currency and crypto assets that are deposited, held, traded, or accrued by customers.
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