Binance.US Avoids Asset Freeze, to Negotiate With SEC
- U.S. District Judge Amy Berman Jackson declined the SEC’s request for a temporary restraining order that would have frozen the assets of Binance.US.
- The judge referred the two organizations to a magistrate judge to work on a compromise that will protect customer interests without shutting down the platform.
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A judge has ordered that Binance.US and the Securities and Exchange Commission (SEC) work on a deal that will avoid freezing the assets of the crypto exchange, Bloomberg reported on 14 June.
According to the publication, U.S. District Judge Amy Berman Jackson declined the SEC’s request for a temporary restraining order that would have frozen the assets of Binance.US. The judge noted that while she is inclined to grant some restrictions on Binance.US, shutting down the platform would “create significant consequences not only for the company but for the digital asset markets in general”.
The judge then referred the two organizations to a magistrate judge to work on a compromise that will protect customer funds without the need to shut down the exchange. Jackson said she will not make a final decision on the SEC’s motion for a restraining order until the two entities had resolved the situation with the magistrate, and scheduled an update on the negotiations for 15 June.
Judge Jackson noted that Binance.US and the SEC were “not that far apart” when it came to reaching a reasonable agreement between the two. A lawyer for the SEC said during the hearing that they were “open to the business continuing to operate”, while a Binance.US representative noted they mainly wanted to be allowed normal operating expenses, and that total asset freeze was out of the question.
The U.S. SEC filed a lawsuit against Binance, Binance.US, and CEO Changpeng “CZ” Zhao last week, alleging the companies had failed to register as securities exchanges, and allowed users to trade crypto assets that the SEC considered securities. The regulator later requested a temporary restraining order against Binance.US arguing that CZ had access to its funds, claims the CEO had denied.
- During an interview with FT, CEO Brian Armstrong said that before the lawsuit a SEC staff member had said that all crypto except BTC was security, and should be delisted.
- When asked how he came to that conclusion, the SEC staff member reportedly said “we’re not going to explain it to you, you need to delist every asset other that Bitcoin”.
Coinbase CEO Brian Armstrong appears on stage at the 2014 TechCrunch Disrupt Europe/London, at The Old Billingsgate on October 21, 2014 in London, England. Anthony Harvey/Getty Images for TechCrunch
- A federal judge ruled that the sale of XRP through exchanges and algorithms did not qualify as selling securities, which could have a major impact on several SEC lawsuits.
- The institutional sale of the token, however, did violate federal securities laws, and the lawsuit between the SEC and Ripple will have to go to trial.
- Binance had filed a complaint against a 17 June SEC press release, claiming that the regulator had made “misleading” statements that could have tainted the jury pool.
- The presiding judge rejected the complaint by saying that it was not the court’s mandate to “wordsmith” public statements, and that it was not clear if the statements had any effect on the case.