Judge Denies Restraining Order On Binance.US Assets
In the ongoing legal battle between the U.S. Securities and Exchange Commission (SEC) and Binance and Binance.US, the federal judge presiding over the case, Judge Amy Berman Jackson, declined to issue a temporary restraining order freezing the assets of Binance.US, the U.S. trading platform associated with Binance. The decision allows Binance.US to continue its operations while negotiations for restrictions with the SEC take place.
Binance, in response to the SEC’s request for an asset freeze, had proposed a compromise that would include transferring US customer cryptoassets to new wallets with new private keys that would be under the sole control of US-based officers at BinanceUS. The judge ordered that…
— Wu Blockchain (@WuBlockchain) June 14, 2023
Avoiding Restraining Order
Judge Jackson stated that if both parties can agree on limitations, a restraining order would be unnecessary. However, she did order Binance.US to provide a list of its business expenses to the court and instructed the parties to continue their negotiations. A status update is expected by the end of the day on Thursday.
During the courtroom proceedings in Washington, D.C., the judge expressed frustration with the SEC attorneys regarding their motion to freeze all of Binance’s assets. The SEC’s concern was focused on whether anyone from Binance’s global platform, including CEO Changpeng “CZ” Zhao, had access to the private keys controlling the funds. Judge Jackson repeatedly asked about the movement of Binance.US customer funds outside of the U.S., seeking clarification from the SEC attorneys.
Earlier in the day, the judge hinted that she may have been inclined to impose certain restrictions on Binance’s access to Binance.US assets but stopped short of issuing a full restraining order. She ordered the companies to reconcile their proposed limitations and instructed the SEC to compare its desired restrictions with those proposed by the companies as an alternative to a restraining order. The SEC lawyer, Jennifer Farer, assured the judge that they were open to allowing Binance.US to continue its operations, while representatives from Binance.US requested permission for normal operating expenses, emphasizing their unwillingness to accept a complete asset freeze.
Shifting Stance
Farer accused Binance.US of continuously changing its narrative regarding how crypto assets and funds were held, initially claiming an agreement with Binance and later stating that the agreement was not operational or had been suspended. Binance.US even suggested the possibility of ceasing operations in the U.S., prompting the SEC’s request for an emergency order. Despite the disagreements, Judge Jackson noted that the parties were not too far apart, expressing the hope that they could reach an agreement that would provide sufficient time to address the details of the case.
The SEC filed a lawsuit against Binance, Binance.US, and CZ Zhao, accusing them of operating as an unregistered securities exchange, brokerage, and clearing agency. The regulator also alleged significant mingling of funds, enabling Zhao, who resides in the UAE and is a Canadian national, to access Binance.US customer assets.
