The US Securities and Exchange Commission (SEC) has recently filed an emergency motion, seeking a temporary restraining order to freeze assets held by BAM Trading and BAM Management, which operate under the name Binance.US. This action follows the regulator’s recent lawsuit against Binance and its founder Changpeng Zhao, which includes accusations of “blatant disregard of the federal securities laws” and 13 charges against them.
The SEC claims that Zhao and Binance created BAM Trading and BAM Management as part of a complex scheme to evade US laws. They argue that Binance.US was portrayed as an independent entity, when in reality, Zhao and Binance maintained substantial control over it. BAM Trading reportedly holds $2.2 billion in crypto and hundreds of millions more in fiat currency.
The regulator’s intention was to ensure that investors’ assets would be custodied in the US, and under the control of BAM Trading alone, without the involvement of Binance and Zhao. The SEC believes that the defendants have failed to provide sufficient assurances and is now seeking the court’s assistance for the safety and availability of investor assets.
Furthermore, the SEC has expressed concern about the inability of BAM Trading to accurately represent the status of its customer assets, and it also highlights the apparent “disdain for US law” exhibited by Zhao and Binance. The regulator has requested the judge to order that relevant documents cannot be destroyed and to require sworn accounting from the exchange.
In response to the restraining order, Binance’s founder Zhao took to Twitter to clarify that the order would only affect Binance.US, if it is granted by the court. He emphasized that it does not impact Binance.com and assured users that their funds are safe.
The legal action against Binance and its alleged “elaborate scheme” to bypass US regulations raises several crucial questions for the future of the crypto industry. If these allegations are proven true, it could lead to more stringent regulatory scrutiny for other platforms that may try to operate in a similar manner. Conversely, if the SEC’s case is dismissed, it could embolden other exchanges to test the boundaries of the regulatory landscape.
In conclusion, the outcome of this case will have significant implications for the crypto industry’s future, not only for Binance.US but also for other platforms that may face similar regulatory challenges. As the situation unfolds, it will be crucial for investors and the crypto community to stay informed and make educated decisions, keeping in mind the potential consequences of such legal battles.
Source: Cryptonews
