Binance.US fights SEC's asset freeze in legal battle

Binance.US, the American arm of the popular cryptocurrency exchange Binance, has launched a strong defence against the Securities and Exchange Commission’s (SEC) attempt to freeze its assets. The company argues that such a move would effectively cripple its operations and bring an end to its business.

In a filing submitted on June 12, Binance.US criticized the SEC’s emergency motion for a temporary restraining order, describing it as draconian and unduly burdensome. The hearing to address this restraining order is set to take place on June 13 in the U.S. District Court for the District of Columbia.

Binance.US asserts that the requested restraining order would not only harm its customers but also force the closure of BAM Trading Services Inc., the entity responsible for providing crypto trading and exchange services for Binance.US. The company states that the order would prevent BAM from defending itself in the ongoing litigation.

Furthermore, Binance.US questions the SEC’s entire approach to pursuing legal action against it, stating that all of the regulator’s claims are baseless. The company highlights that the SEC has failed to identify a single security trading on BAM’s platform, even though the regulator has alleged that at least 68 cryptocurrencies qualify as securities.

In the filing, Binance.US states, “The SEC suggests that it is a foregone conclusion that cryptocurrency is a security, but that is not the case. That numerous cryptocurrency exchanges, including BAM, have operated in the United States for years without interference by the SEC belies the claim that they are clearly covered by the securities laws.”

Binance.US also highlights that it has made substantial efforts to cooperate with the SEC’s investigation, which commenced on December 20, 2020. The company discloses that it has provided over 700,000 individual communications and extensive operational data to support the investigation.

The SEC initially launched legal action against Binance and its affiliates on June 5, accusing the crypto exchange of failing to register as a securities exchange and allowing U.S. customers to trade cryptocurrencies categorized as securities.

In addition to these allegations, the SEC claims that Binance CEO Changpeng Zhao (CZ) had access to Binance.US customer funds and moved $12 billion in Binance’s funds through a privately-controlled entity named Merit Peak.

On June 6, the SEC filed an emergency motion for a temporary restraining order against Binance, seeking to freeze assets held on Binance.US until the exchange could prove that CZ or any other executive at Binance couldn’t access and move the funds.

While both Binance and Binance.US have vehemently denied the SEC’s claims on Twitter in the past week, a joint memorandum submitted alongside the filing marks the first official comment addressing the accusations.

The memorandum argues that the SEC has failed to provide any evidence of mishandling or misuse of customer assets by BAM Trading Services Inc. It further asserts that there is no real emergency, except the one manufactured by the SEC for its own purposes.

Binance.US remains resolute in its defence against the SEC’s allegations, seeking to secure its assets and continue serving its customers within the legal framework.