Binance, one of the largest cryptocurrency exchanges in the world, has been in a legal tussle with the SEC, which has accused the company of operating unregistered exchanges and listing unregistered securities. In recent court documents, Binance’s legal team has fired back, claiming that the SEC has no evidence of asset commingling and that the regulator contradicted its own statements.
The court motion, filed by attorneys for Binance, BAM Management, BAM Trading, and CEO Changpeng Zhao, demands that the court overseeing the SEC’s lawsuit against the crypto company ensure that the regulator complies with the applicable rules of conduct. This motion comes in the wake of the June 13 hearing for the SEC’s temporary restraining order (TRO), which would have affected exchange assets. The TRO request sought to freeze the assets of Binance.US operators BAM Management and BAM Trading.
However, during the hearing, the judge pushed both parties to find a middle ground. The defendants argued that the SEC had no evidence of asset commingling and internal conversations regarding Zhao and Binance’s knowledge of illegal conduct. According to transcripts included in the court documents, the SEC eventually conceded that it had no evidence of asset commingling and offshore money movements.
Following the hearing, the SEC withdrew its request for a total asset freeze, and both parties were able to reach a deal to prevent the issuance of a TRO. Nonetheless, Binance maintains that the SEC’s statements about the lawsuit are misleading and inconsistent with the rules of professional conduct.
Despite Binance’s insistence on a lack of evidence, some may still approach the situation with healthy skepticism. The company’s ongoing legal battle with the SEC is undoubtedly taking a toll on the exchange, with Binance.US already reducing its headcount as a result. On the other hand, the SEC’s withdrawal of its asset freeze request and its inability to produce the evidence it initially claimed to have could be viewed as an indication that the allegations were overstated.
Ultimately, this high-profile legal battle between Binance and the SEC raises pertinent questions for the broader adoption of cryptocurrencies and digital assets. It highlights the challenges of regulating an emerging and ever-evolving technology, as well as the potential consequences for companies like Binance that face regulatory scrutiny. While the outcome of this specific case remains uncertain, it serves as a crucial reminder of the importance of transparency and compliance in the blockchain and cryptocurrency industries.
Source: Blockworks
