Binance called the SEC’s actions as some form of retaliation rather than genuine concern for the safety of Binance.US customers. The exchange said it is committed to defending itself in court.
One day after the crypto exchange was sued binanceThe US SEC requested the court to freeze the funds of Binance.US, the US affiliate of the exchange. On Tuesday evening, the SEC filed an emergency motion in Washington, DC federal court.
The securities regulator also requested the judge to return both fiat currency and crypto held by customers of Binance.US. The freezing order only applies to two Binance.US holding companies – BAM Trading and BAM Management. The SEC alleges that the two companies controlled by Zhao made “illegal gains” of more than $400 million in profits and venture fundraising.
Additionally, the order will apply to dozens of accounts that the exchange holds with Prime Trust, Exos Bank, the defunct Silvergate Bank and other institutions. The SEC called the emergency restraining order necessary and would “prevent the dissipation of the assets available for any judgment, given defendants’ years of infringing conduct, in blatant disregard of the laws of the United States”.
This Order Forced Binance Founder changpeng zhao “show cause” why a “preliminary injunction should not be entered” against Zhao and his two holding companies. It will also prevent all three Binance.US entities from destroying any evidence.
In the filing, the federal regulator also said that $2.2 billion of Binance.US customer funds are at “significant risk” unless the freezing order is in place. The securities regulator alleged that “Zhao and Binance had free reign” over “billion dollars of customer assets”.
Binance and Zhao defend their positions
Soon after the SEC filed the emergency resolution on Tuesday evening, Binance.US responded quickly to reassure investors that the funds were SAFU. It noted: “User assets remain safe and secure and the platform remains fully operational, with deposits and withdrawals as normal.”
Binance called the preliminary injunction filing “completely unfair” and blamed SEC staff for trying to get “profit in litigation versus a genuine concern about the safety of customer assets.” binance noted,
“Recently – despite years of engagement – ​​SEC staff have not expressed concern about the protection of client assets. And through nearly round-the-clock communication last week, the Company’s counsel has raised concerns about the protection of client assets. Addressed SEC staff concerns.
Binance said that even though it provided information to reassure SEC staff about the safety of customer assets, the staff chose to file a motion for a temporary restraining order and preliminary injunction. Binance expressed its dismay at this action but is determined to defend itself in court.
Bhushan is passionate about Fintech and has a good grasp of understanding the financial markets. His interest in economics and finance drew his attention to the newly emerging blockchain technology and cryptocurrency markets. He is in the process of continuous learning and keeps motivating himself by sharing his acquired knowledge. In his spare time he reads thriller fiction novels and occasionally explores his culinary skills.
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