A federal judge in the U.S. has denied a temporary restraining order against Binance and Binance.US, allowing the companies to continue operating while working on restrictions with the U.S. Securities and Exchange Commission (SEC). As part of the ongoing negotiations, Binance.US must submit a list of its business expenses to the court, with a status update due by the end of the week.
In a heightened courtroom atmosphere, the judge had some strong words for SEC attorneys regarding their motion to freeze all of Binance’s assets until it could be proven that no one on Binance’s global platform, including founder Changpeng “CZ” Zhao, had access to its private keys. The judge repeatedly questioned whether any Binance.US customer funds had actually left the U.S. due to the SEC’s chief concern being that Binance’s global platform controlled enough private key shards to move funds.
The judge had previously hinted at granting some form of restriction on Binance’s access to Binance.US assets but stopped short of a full restraining order, pushing both companies to resolve their proposed restrictions while comparing the SEC’s requirements against the firms’ counterproposals.
The SEC lawyer clarified their intention for Binance.US to continue operating; however, representatives of Binance.US expressed their unwillingness for a total asset freeze, which they consider a “death penalty.” The SEC lawyer highlighted Binance.US’s inconsistent accounts on how crypto assets and funds were held, further stating that Binance.US previously informed the SEC about possibly ceasing its U.S. operations, spurring the need for an emergency order.
Nonetheless, Judge Jackson acknowledged that both parties were not far from reaching an agreement, allowing more time for a thorough examination of the case details. The SEC sued Binance, Binance.US, and Changpeng “CZ” Zhao last week for allegedly operating as an unregistered securities exchange, brokerage, and clearing agency. Moreover, the regulator accused Binance of fund commingling, granting Zhao access to Binance.US customer assets.
Furthermore, Judge Jackson delved into the core issue of the lawsuit: determining whether a crypto asset is a security or merely a commodity. The judge’s inquiries about distinctions between a “crypto asset” and a “crypto asset security” did not receive satisfactory answers from either the SEC or Binance representatives, exposing the complexity of an issue that has long troubled the crypto industry.
Source: Coindesk
