U.S. District Judge Amy Berman Jackson has directed Binance.US, the U.S. arm of the largest crypto exchange, and the U.S. Securities and Exchange Commission (SEC) to a magistrate judge to work on a reconciliation about a potential asset freeze. As part of the ruling, the two sides will work on a compromise deal to prevent a total asset freeze at Binance.US. Jackson will not need to make a decision on the SEC's request to freeze Binance.US' assets if the two sides agree upon a deal. - Last week, the SEC filed an emergency action application for a temporary restraining order, requesting the court to freeze the assets of Binance.US.
- Binance.US recently asked the court to reject the SEC's request, saying that such a move would harm both its business and customers.
- The company also stated that its operations would quickly come to a stopping point when it could not pay employees, vendors, suppliers, and professionals and maintain the trading platform, and a potential freeze could be misunderstood by its banking partners.
- Judge Jackson agreed with Binance, pointing out that shutting the firm down would create significant consequences for the company and the digital asset markets in general.
- To compromise, Binance proposed the transfer of U.S. customers' crypto assets to new wallets with new private keys under the control of U.S.-based officers at Binance.US.
- During the hearing, an SEC attorney said the agency is open to a freezing process that would allow Binance.US to cover its operating costs.
- The judge ordered the exchange to file a list of its business expenses and professional fees so that the regulator could better understand the requirements to let the platform keep operating.
On June 5, the SEC also sued Binance and CEO Changpeng Zhao (CZ) over U.S. law violations with 13 charges through a 136-page complaint. - The allegations in the complaint include mishandling customer funds, misleading investors and regulators, violating securities laws, creating an extensive web of deception, conflicts of interest, lack of disclosure, wash trading, and calculated evasion of the law.
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