Binance.US Counters SEC’s Failed Claims, Disputes Motion to Freeze Funds”

Binance.US Counters SEC’s Failed Claims, Disputes Motion to Freeze Funds

Binance.US has asked the court to deny the securities regulator’s proposed temporary restraining order against its assets, claiming that the move would “effectively end” its business.

In a June 12 filing, Binance.US slammed the Securities and Exchange Commission’s emergency motion for a temporary restraining order on its business, calling it “draconian and unduly burdensome.”

Hearing on the Temporary Restraining Order

The hearing on the temporary restraining order is scheduled for June 13 in the U.S. District Court for the District of Columbia.

Binance.US Argues Against the Restraining Order

Binance.US argued that the restraining order would force the closure of BAM Trading Services Inc., the entity that provides crypto trading and exchange services for Binance.US, stating:

• “The requested relief would primarily harm BAM’s customers, effectively put BAM out of business, and prevent BAM from defending itself in this litigation.”

Notably, Binance.US took aim at the regulator’s entire approach to pursuing legal action against it, asserting that “all of the SEC’s claims fail” because the regulator has not yet “identified a single security trading on BAM’s platform.” At the time of publication, the SEC has alleged that at least 68 cryptocurrencies are securities.

“The SEC suggests that it is a foregone conclusion that cryptocurrency is a security, but that is not the case. That numerous cryptocurrency exchanges, including BAM, have operated in the United States for years without interference by the SEC belies the claim that they are clearly covered by the securities laws,” wrote the filing.

Binance.US’s Cooperation with the SEC Investigation

Furthermore, Binance.US said that it had made “significant efforts” to cooperate with an ongoing SEC investigation that began on Dec. 20, 2020. According to the filing, the results of this investigation have yielded more than 700,000 individual communications and “bespoke data” on its day-to-day operations.

SEC’s Legal Action against Binance and Affiliates

The SEC first launched major legal action against Binance and its affiliates on June 5, accusing the crypto exchange of failing to register as a securities exchange and for allowing U.S. customers to trade cryptocurrencies it claims are securities.

Additionally, the regulator accused Binance CEO Changpeng Zhao (CZ) of being able to access Binance.US customer funds and alleged that he moved $12 billion in Binance’s funds through a privately-controlled entity called Merit Peak.

SEC’s Emergency Motion for a Temporary Restraining Order

The next day on June 6, the SEC filed an emergency motion for a temporary restraining order against Binance, requesting that assets held on Binance.US be frozen until the crypto exchange could prove that the funds were not able to be moved by CZ or any other executive at Binance.