Judge Rejects Binance’s Complaint Over ‘Misleading’ SEC Statements

A federal judge has denied a request from Binance’s lawyers that could have stopped the Securities and Exchange Commission (SEC) from using certain language in its public statements, documents from 26 June show.

According to the court filings, presiding Judge Amy Berman ruled that it was not the court’s mandate to “wordsmith” public statements from either of the parties in the case, and as such it was unnecessary for it to intervene in this issue. Binance’s complaint stemmes from a 17 June SEC press release, in which the regulator claimed Binance and CEO Changpeng “CZ” Zhao could “commingle customer assets or divert customer assets as they please”.

Binance’s lawyers have largely denied the allegations of the SEC, and maintained there is “no evidence” that Binance.US customer assets had been commingled or misused in any way. Filed on 21 June, Binance’s complaint alleges that the U.S. securities regulator tried to introduce “unwarranted confusion into the marketplace” through its use of “misleading extrajudicial statements”, which had potentially tainted the jury pool. Judge Berman ruled that:

“While all of the lawyers in this case should adhere to their ethical obligations at all times, it is not apparent that Court intervention to reiterate that point is needed at this time, or that it is necessary or appropriate for the Court to get involved in wordsmithing the parties’ press releases. Nor is it clear that the agency’s public relations efforts to date will materially affect proceedings in this case.”

The U.S. SEC filed a lawsuit against Binance, BAM Trading — which operates as Binance.US — and CZ on 5 June, alleging that the entities had violated several securities laws. The regulator later requested a temporary restraining order against Binance.US by claiming CZ had access to customer funds, but the presiding judge denied the motion and instead asked the SEC and the exchange to work on a compromise.