SEC Seeks Court Order to Freeze Binance US Assets
In a recent development, the U.S. Securities and Exchange Commission (SEC) has requested a court to issue a temporary restraining order to immobilize assets connected to Binance.US. The request, filed in the D.C. District Court, seeks approval to freeze assets linked to BAM Management US Holdings and BAM Trading Services, the entities that hold and operate Binance.US.
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The SEC had previously initiated a lawsuit against Binance.US, Binance Global, and Changpeng Zhao, Binance's founder and CEO. The accusations span a variety of compliance and control failures, with allegations that companies associated with Zhao had unauthorized access to Binance.US customer funds.
The SEC, in its filing, argued for expedited relief to ensure customer asset safety and to prevent the dilution of potential judgement resources. The commission expressed concerns over the defendants' extended violation of U.S. laws, evasion of regulatory scrutiny, and uncertainty around financial transfers and customer asset custody and control.
The commission has also sought an order directing defendants to repatriate assets held for the benefit of BAM customers, an order preventing the destruction of records by the defendants, and several others.
Should the order be granted, Binance would have a five-day window to secure exclusive access for Binance.US to customer funds. Additionally, within 30 days, all customer assets would be relocated to new wallets accessible only by Binance.US.
Binance.US, in a recent tweet, reassured that “user assets remain safe and secure” and that its legal team has provided the SEC with details addressing fund safety concerns.
Monday's filing hinted at the potential request for a temporary restraining order, with the SEC indicating that it might seek preliminary injunctive relief, including asset freezes and a “verified accounting”. In response to the initial lawsuit, Binance maintained that user funds on Binance.US were never jeopardized.
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