The SEC has recently taken legal action against popular crypto exchange Binance and requested a court to freeze the assets of Binance.US. This bold move came shortly after the regulatory body accused Binance and its CEO of multiple instances of defrauding investors, unregistered broker-dealer and clearinghouse operations, and improper fund commingling.
The freezing order, if approved, would apply only to Binance.US and not to the exchange’s non-US entities. Notably, it would extend to numerous accounts held by Binance.US at various banking institutions, including Axos Bank, Prime Trust, Silvergate Bank, among others. According to the SEC, two foreign entities under Zhao’s control – Sigma Chain and Merit Peak – have been unlawfully mixing billions of dollars of customer funds with Binance’s finances.
The SEC firmly justifies its request for the restraint order, mentioning that it is “necessary to prevent the dissipation of available assets for any judgment, given the Defendants’ years of violative conduct, disregard of the laws of the United States”. This portrays the SEC as determined to act against perceived misconducts by crypto businesses, and it creates a conflict of interest for the crypto community, which often supports less regulation and more freedom for blockchain-based operations.
In response to the SEC’s motion, Binance.US took to Twitter to assure users that their assets remained “safe and secure” and that the platform was running smoothly. The exchange argued that the SEC’s attempt at freezing its assets was more about gaining a legal advantage than genuine concern for customer safety.
Binance.US highlighted that, up until recently, the SEC had not voiced concerns over customer asset security despite years of engagement. The company’s legal team has been in ongoing communication with the SEC, assuaging any concerns about the safety of customer assets. Nonetheless, the regulatory agency decided to proceed with a temporary restraining order and preliminary injunction request, leaving Binance.US disappointed but prepared to defend itself in court.
As the legal battle progresses, the crypto community is keenly observing the unfolding events. It remains to be seen whether the SEC’s actions will ultimately safeguard customers’ interests or stifle the growth and innovation in the blockchain industry. Either way, this case presents a fascinating intersection between the often-opposing forces of regulation and decentralization, bound to have lasting ramifications on the crypto world.
Source: Coingape
