Binance.US and SEC strive to find a solution, working together to prevent a complete freeze of assets in a race of time.
Court Urges Binance.US and SEC to Find Middle Ground to Prevent Asset Freeze
The court has intervened in the ongoing legal battle between Binance.US and SEC, urging both parties to compromise to avoid a complete freeze of assets. The SEC initiated legal action against Binance and its affiliated entities, leading to a request for a temporary restraining order and asset freeze. With the court’s intervention, negotiations are underway to find a resolution that protects customer funds while allowing the exchange to continue its operations.
US District Judge Amy Berman Jackson, presiding over the case, has referred Binance.US and the SEC to a magistrate judge, Zia Faruqui, to facilitate discussions and work towards a mutually agreeable solution. The court has set a deadline of June 15, 5 pm ET, for the parties to come to an understanding.
The SEC’s motion for a temporary restraining order highlighted concerns about commingling customer funds with Binance’s assets, citing two foreign entities controlled by Binance CEO Changpeng Zhao. These entities, Sigma Chain and Merit Peak, allegedly facilitated the mixing of billions in customer funds, which raised regulatory concerns.
In response, Binance.US proposed a compromise solution during the court hearing. The exchange suggested transferring US customer crypto assets to new wallets with fresh private keys under the sole control of US-based officers at Binance.US.
They also pledged not to transfer any assets or make payments benefiting any Binance entity without a judge’s order. This proposal aimed to ensure the safety of customer funds while allowing the exchange to continue its operations.
Binance.US argued that a complete freeze of assets would harm customers and impede regular business operations. They emphasized the need to cover ordinary expenses such as rent, salaries, vendor payments, and software licensing. The exchange sought the court’s permission to continue essential operations while safeguarding customer assets under US control.
Final Thoughts
The court’s intervention in the legal dispute between Binance.US and the SEC demonstrates a commitment to finding a middle ground that safeguards customer assets while allowing the exchange to continue operating. The referral to a magistrate judge and the ongoing negotiations signify the court’s willingness to explore potential compromises.
As the discussions progress, it remains to be seen how Binance.US and the SEC will reach an agreement that addresses regulatory concerns while ensuring the smooth functioning of the exchange and the protection of customer funds.