In the ongoing case between the United States Securities and Exchange Commission (SEC) and Binance, both entities have come to an agreement as advised by the US court. Notably, the deal means Binance has avoided having its assets frozen and will be able to continue serving its U.S. customers.
The deal between both the parties is a result of the order ruled out by Judge Amy Berman Jackson last week. The judge had ordered both the parties to work together in response to SEC’s emergency motion to freeze the assets of Binance’s US subsidiary. Originally, the SEC had sought court order to freeze funds, arguing that it was necessary to “prevent dissipation or transfer of those assets from the jurisdiction of this Court, and protect this Court’s ability to award relief in the form of disgorgement, prejudgment interest, and civil penalties.”
However, last week, Judge Jackson acknowledged that such a freeze would hamstring Binance’s U.S. business and pass the SEC a major victory just days into its lawsuit against the firm. In order to avoid such an outcome, she asked both sides to reach a compromise. To this, the SEC announced that it had secured an agreement to repatriate Binance U.S. customers’ assets to the United States.
Further, the company and its associated entities are also prohibited from spending corporate assets “other than in the ordinary course of business.” Reportedly, Binance’s CEO Changpeng Zhao (CZ) is also named as a party to the agreement, which takes the form of a consent order.
Interestingly, both parties are satisfied with the result of mutual settlement even though there attributes are contrary. While the SEC has painted the latest deal as a win that will prevent Binance from running off with customer funds, Binance has claimed the incident as a victory, noting that the SEC has failed in its attempts to shut down the U.S. exchange.
In an official statement, Binance U.S. emphasized that the SEC has presented no evidence to suggest it has ever misused customer assets. Rather, the firm construes the SEC’s legal maneuvers as an attempt to hurt its business by any means possible. As it stated:
The SEC’s request would have effectively shuttered our business, which is consistent with the agency’s continued attempts to kill the crypto industry by any means, even by making allegations that are not supported by the facts.
Notably, this is one of the many legal battles lined up for Binance in its ongoing feud with the SEC. On June 5th, the SEC filed a lawsuit against Binance According to reports, the SEC has filed 13 charges against the exchange, including unregistered offers and sales of the stablecoins – BNB and BUSD, its services namely the Simple Earn and BNB vault products, and its staking program. Additionally, the regulator claims in its suit that Binance failed to register its online platform as an exchange or a broker-dealer clearing agency.
It also stated that Binance’s “BAM Trading and BAM Management” defrauded equity, retail, and institutional investors about purported surveillance and controls over manipulative trading on the platform, which was in fact “virtually non-existent.” Following this the SEC had filed the motion to freeze the assets of Binance U.S. and even through the motion didn’t pass through, the exchange has delisted several trading pairs and halted USD services.
However, the settlement deal between both the parties would come as a major relief to the investors who panicked about their funds. Nonetheless, as the case proceeds, investors would have a better clarity of their funds’ safety.