SEC and Binance.US to Negotiate a Deal to Avoid Asset Freeze

June 14, 2023

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Binance.US and the Securities and Exchange Commission (SEC) are reportedly trying to strike a deal that could potentially protect the exchange’s assets from being completely frozen.

SEC and Binance.US Referred to Magistrate Court

As per a Bloomberg report on June 14, US District court Amy Berman Jackson directed the SEC and Binance.US to proceed to magistrate court so that they may try to come to a compromise agreement to preserve consumer assets without the necessity of shutting down the exchange.

Judge Jackson observed that until the two parties had resolved the issue with the magistrate, she would not make her decision about the agency’s motion for a temporary restraining order.

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She stated:

“Shutting it down completely would create significant consequences not only for the company but for the digital asset markets in general.”

‘Lot of Conflict Between Each Party’

Likewise, former SEC enforcement lawyer John Read Stark remarked with a tweet before Judge Jackson made her judgment that there was “a lot of conflict between what each party.” According to Stark, this “does not mean the judge cannot order a compromise and find common ground.”

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Additionally, it was noted in a joint memorandum that was made on June 12 prior to the hearing that the regulator had been “unable to identify a single instance” where Binance improperly utilized consumer assets.

US SEC’s War Against Crypto Exchanges

Notably, over recent months, the company has been under investigation from both the SEC and other regulatory bodies. Nonetheless, the SEC filed a lawsuit against Binance along with related businesses. The agency filed more than a dozen complaints against Binance, its US platform, and CEO Changpeng Zhao (CZ) in the District Court of Columbia on June 5.

According to the SEC, the charges relate to a “blatant disregard” for American law. The SEC asserted in its case, which lists 13 different allegations, that Zhao’s ownership over Sigma Chain and Merit Peak allowed for the incorporation of billions of dollars in client money with its own. The SEC then asked for an asset freeze and interim restraining order.