The SEC has filed a motion in the D.C. District Court for a temporary restraining order in a bid to freeze assets tied to Binance.US. The targeted entities include BAM Management US Holdings and BAM Trading Services, the parent and operating firms for Binance.US respectively.
This move comes after Monday’s lawsuit against Binance.US, Binance Global, and the founder and CEO of Binance, Changpeng Zhao, for alleged securities law violations. The SEC claims, among other things, that entities connected to Zhao were able to access Binance.US customer funds.
The SEC’s filing asserted that the rapid implementation of the restraining order was critical to ensure customer asset security and prevent the draining of available assets for any potential judgment “given the Defendants’ years of violative conduct, disregard of the laws of the United States, evasion of regulatory oversight, and open questions about various finance transfers and the custody and control of Customer Assets.”
A second filing solicited an order to challenge why a preliminary injunction should not be granted, among other demands that include a call for an order “prohibiting the destruction of records by the defendants.”
Should the order be granted, Binance will have five days to limit customer fund access to only Binance.US. Furthermore, within a month, all customer assets must be transitioned to new wallets that solely Binance.US can access.
Binance.US has said that “user assets remain safe and security,” and that its attorneys provided the regulator with information addressing concerns over fund safety. The filing from Monday suggested the likelihood of a temporary restraining order request, indicating that the SEC could ask for provisional injunctive relief, which might encompass asset freezes and a verified accounting.
In a statement refuting the initial lawsuit, Binance emphasized that Binance.US user funds were never endangered, asserting that all user assets on Binance and its affiliate platforms, including Binance.US, were safe and secure.
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- Source: https://www.cryptocompare.com/email-updates/daily/2023/jun/07/
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