In a recent development, Binance.US has argued that the Securities and Exchange Commission’s (SEC) attempt to freeze its funds is a “draconian and unduly burdensome” move. This statement comes in response to the SEC’s allegations that Binance, Binance.US, and Changpeng “CZ” Zhao have operated as an unregistered securities exchange, broker, and clearinghouse to allow the trading of certain unregistered cryptocurrencies.
While Binance.US considers the relief sought by the SEC as unnecessary and unjustified, the regulators believe that freezing the funds is crucial to maintain the status quo. On the other hand, Binance and Binance.US have repeatedly denied these claims through blog posts and tweets.
The SEC’s motion for a temporary restraining order is aimed at freezing the funds until Binance.US can prove that no one at Binance, including its majority owner Zhao, can access them. Moreover, the SEC contends that Binance and Zhao were able to transfer millions to Merit Peak and Sigma Chain – two companies owned by Zhao.
As the legal battle unfolds, the consequences of the potential freezing of Binance.US’s funds raise valid concerns on both sides. On one hand, Binance.US claims that freezing its funds would primarily harm its customers, put the company out of business, and prevent them from defending themselves in court. This is due to the fact that it would no longer be able to pay its employees, vendors, or maintain its technology.
On the other hand, the freeze might spook Binance.US’s banks, one of which has already stated it would cease doing business with the firm. The U.S. District Court for the District of D.C. is set to hold a hearing on the motion, further intensifying the ongoing dispute between the two parties.
As the regulatory environment around cryptocurrencies becomes increasingly scrutinized, the outcome of this court-ordered legal battle may have significant implications for the industry. With expert legal counsel from both sides joining the case, including notable names such as George Canellos, a former Department of Justice prosecutor and one-time SEC Division of Enforcement co-director, it is clear that the stakes are high.
Ultimately, while the battle between Binance.US and the SEC raises valid concerns for both parties, it is essential to strike a balance between ensuring the safety of the crypto market and avoiding unnecessarily harsh regulatory measures. The outcome of this case has the potential to set a precedent for future regulatory actions, as well as potentially transforming the way crypto businesses operate within the current legal framework.
Source: Coindesk
