SEC and Binance.US must reach an agreement to protect client assets while allowing the platform to continue operating as normal. Such an order was given by the court in response to the petition of the regulator.
UPDATE: The judge ordered Binance & the US Securities and Exchange Commission to try to reach an agreement to secure the US assets but allow Binance to continue operating as usual, which the company said a freeze wouldn’t allow. Binance must file a list of business expenses. https://t.co/jJUrDybaIH
— Katie Buehler (@bykatiebuehler) June 13, 2023
The US division of the bitcoin exchange should submit a list of business expenses by noon on June 15 local time.
On June 6, the SEC filed a motion to freeze digital assets held by Binance.US. The head of Binance, Changpeng Zhao, clarified that such actions, if approved by the court, are applicable only to the US division, and not to the international exchange.
On June 12, Binance.US disputed the Commission’s emergency petition, calling it “draconian and overly burdensome.”
According to journalist Cathy Buhler, the judge did not rule on the regulator’s request to freeze the platform’s assets. The latter noted that the parties must come to an agreement on their own.
NOTE: The judge HAS NOT ruled one way or the other on the motion to freeze assets, but she said she’d rather have the parties come to an agreement on their own. She asked for a status report on the negotiations by Thursday afternoon.
— Katie Buehler (@bykatiebuehler) June 13, 2023
According to Bloomberg, the judge noted that the two parties are “not that far apart” on how to protect client funds. She referred them to a justice of the peace to work out a compromise. In the case of a positive verdict, you will not have to make a decision on the SEC petition.
During the hearing, a Binance.US spokesperson noted that the exchange should be able to fund normal expenses, while an asset freeze could be “misinterpreted by banks.”
“A complete shutdown would create significant repercussions not only for the company, but for the cryptocurrency markets as a whole.”The judge agreed.
Binance.US lawyers have proposed to the SEC, as a compromise, to move the assets of US clients to new wallets with new secret keys that would be under the exclusive control of platform employees based in the US.
The platform has committed not to transfer assets or make payments to any entity within the Binance structure without the order of a judge.
The SEC, in its compromise proposal, asked Binance to repatriate cryptocurrencies owned by customers to the United States, where they would be controlled by entities independent of the parent company.
During the hearing, one of the Commission’s lawyers said the regulator was open to a “highly specialized exemption” from any freeze to cover the platform’s operating costs.
Recall that on June 5, the SEC sued Binance and Zhao. The agency filed 13 charges, including the sale of unregistered securities.
The company responded by issuing a statement saying it was prepared to “resolutely defend itself”.
Binance.US later announced a suspension of USD deposits and advised clients to withdraw fiat funds by June 13th.
Found a mistake in the text? Select it and press CTRL+ENTER
Cryplogger Newsletters: Keep your finger on the pulse of the bitcoin industry!