SEC seeks restraining order against Binance

By: Michael Wilson

SEC seeks restraining order against Binance

June 7, 2023 6:30 AM

Binance has been accused of mishandling cash and operating an unlicensed securities exchange by the SEC.


In an emergency application filed→ on June 6 in U.S. District Court in the District of Columbia, the U.S. Securities and Exchange Commission, also known as the SEC, requested eight steps be taken against Binance, Binance.US, and CEO Changpeng Zhao (CZ). 

 

Binance.US's assets are to be frozen, and U.S. clients' or Binance.US's fiat and cryptocurrency holdings are to be repatriated. Furthermore, the move prevents the accused from destroying, modifying, or hiding evidence and enforces other discovery obligations. 


According to the document:

 

"Given the Defendants' many years of unlawful behavior, disregard for U.S. laws, evasion of oversight from regulators, and open questions regarding several financial transactions and the management and custody of Customer Assets, this relief is urgently required to ensure the security of customer assets and prevent the depletion of available assets in the event of a judgment."


The motion was supported with a suggested order, which was ready for the judge to sign.


It is planned that within 10 days, all U.S. customer assets will be returned to Binance.US, and all crypto assets will be transferred to new wallets with new private keys, which will be in the custody of executives and employees of BAM Trading in the United States. Customer assets would still be redeemable, but transfers exceeding $100,000 would necessitate special handling.  


The defendants would also be compelled to supply the SEC with a list of client fiat and crypto assets, as well as a list of Binance.US customers and their balances, under the terms of the order.


The SEC filed a claim against Binance, the world's largest cryptocurrency exchange, the day before for securities law breaches. Many of the claims leveled against Binance had previously appeared in the press and had been denied by the exchange as a "conspiracy theory."