Binance.US and SEC Working to Avoid Asset Freeze
Binance.US may reportedly be able to avoid having its assets frozen.
The cryptocurrency exchange and the U.S. Securities and Exchange Commission (SEC) have agreed to work toward a deal that would not involve freezing the assets of Binance.US amid the company’s ongoing regulatory battle, Bloomberg News reported Tuesday (June 13).
According to that report, U.S. District Judge Amy Berman Jackson said during a hearing in Washington that the two sides “aren’t that far apart” on ways to safeguard customer funds without shuttering the exchange.
“The nitty-gritty of it is better handled by you than by me,” Jackson said, noting that if the two sides reach a deal, she wouldn’t need to rule on the SEC’s restraining order.
The regulator asked for the asset freeze last week, soon after filing suit against Binance.US parent Binance Holdings and founder Changpeng Zhao, accusing them of misleading investors, violating securities rules and mishandling investor funds.
Biannce has said it was “disappointed” with the SEC’s move, and contends it has attempted to work with the regulator and come to a negotiated settlement.
“While we take the SEC’s allegations seriously, they should not be the subject of an SEC enforcement action, let alone on an emergency basis,” the company said on its blog last week. “We intend to defend our platform vigorously.”
As PYMNTS reported Tuesday, Binance.US argues that freezing its assets would essentially put it out of business.
A company attorney restated that case again in court, per the Bloomberg report, saying: “We are not willing to accept the death penalty eight days into our case."
And according to Bloomberg, Berman Jackson pointed out that the freeze could have ramifications beyond its effect on Binance.
“Shutting it down completely would create significant consequences not only for the company but for the digital asset markets in general,” the judge said.
As noted here Tuesday, this regulatory battle has placed more pressure on lawmakers to come up with guidelines for digital assets.
“Following recent Securities and Exchange Commission (SEC) lawsuits against Coinbase and Binance, the crypto sector is facing more uncertainty and challenges than ever when it comes to regulation and compliance with existing U.S. laws,” PYMNTS wrote.
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