Binance.US and SEC Working on a Deal to Avoid Total Asset Freeze – Here's What You Need to Know
Binance.US and the US Securities and Exchange Commission are trying to reach a solution in order to avoid a total asset freeze.
According to a report from Bloomberg, US District Judge Amy Berman Jackson announced Tuesday that the two sides “aren’t that far apart” on ways to protect billions of dollars in customer funds without shutting the exchange down while the SEC’s lawsuit proceeds.
Currently, the two parties are working on a compromise agreement, with the judge referring them to a magistrate judge to find a mutually agreed upon solution.
“Shutting it down completely would create significant consequences not only for the company but for the digital asset markets in general," the judge reportedly said.
Last week, the SEC requested an asset freeze for Binance.US, the US arm of cryptocurrency exchange Binance, as part of its lawsuit against the company and its founder Changpeng Zhao.
In the complaint, the SEC accused Binance and Zhao of mishandling customer funds, misleading investors and regulators, and breaking securities rules.
The commission also claimed Binance improperly moved billions of dollars of customer funds to a bank account for an entity controlled by Zhao.
Those funds were transferred to a third party and then appeared to be used to purchase and sell crypto, the regulator said.
Binance.US, which is fighting the SEC’s suit and insists that customer assets are safe, claimed during the hearing that blocking the flow of all funds would detract from business and would ultimately harm customers.
One of the Binance.US lawyers emphasized that the platform needs to have the ability to cover ordinary business expenses such as payments for rent, salaries, vendors, and licensing of software.
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