Attorneys for Binance.US and Binance CEO Changpeng Zhao have countered the US Securities and Exchange Commission’s (SEC) move to freeze its assets. In a recent court filing, they argue that there is no risk to customer assets; they claim there is no “emergency” beyond what the SEC has fabricated for its own interests. This statement comes ahead of a Tuesday hearing to address the SEC’s proposed restraining order.
The lawyers argue that granting the SEC’s “requested relief” would not only hurt Binance.US clients but could effectively bring an end to BAM Trading Services Inc. and BAM Management US Holdings Inc., which operate Binance.US.
Last week, the SEC leveled 13 charges against Binance and Zhao, accusing them of blatant disregard for federal securities laws. In response, the regulatory agency filed an emergency motion seeking a temporary restraining order in the US District Court for the District of Columbia, with hopes of freezing assets for BAM Trading and BAM Management. The SEC claims this is necessary to ensure the safety of customer assets.
Behind the scenes, interactions between the SEC and Binance have been unfolding since late February 2023 when Binance and Zhao first learned they might be targets in an investigation involving Binance.US. Despite frequent communication in the subsequent three months, the SEC never expressed concern over Binance.US user assets’ safety and security, according to the lawyers.
On May 30, 2023, the SEC’s position took a sharp turn when it stated in a letter to BHL that it had “significant questions and concerns” regarding the safety of customer assets and the availability of funds at BAM Trading. This communication continued until June 2, and the SEC filed its lawsuit days later on June 5.
It can be observed that Binance and Zhao’s attorneys have a point; if the regulators have genuine concerns for customer assets and have been investigating openly for years, one may question the sudden urgency. On the other hand, the SEC’s role is to protect investors and maintain fair, orderly, and efficient markets.
In conclusion, while Binance and Zhao’s legal team emphasizes that granting the SEC’s requested relief would harm customers and effectively end BAM’s business, the SEC continues to argue that relief is necessary to ensure customer asset safety. The outcome of the impending hearing could have significant implications for Binance.US and its clientele. As this unfolds, the crypto community and potential investors will undoubtedly keep a close eye on developments.
Source: Cryptonews
