SEC Strikes Binance with Asset Freeze

The U.S. Securities and Exchange Commission (SEC) has filed for a temporary restraining order to freeze assets linked to Binance US. The request targets BAM Management US Holdings and BAM Trading Services, the entities behind Binance US operations. The move follows the SEC's lawsuit against Binance US, Binance Global, and Binance CEO Changpeng Zhao for alleged compliance failures and claims of unauthorized access to Binance US customer funds.

The SEC requests urgent court approval to secure customer assets and prevent funds from being dispersed, citing the defendant's history of alleged unlawful conduct, avoidance of regulatory scrutiny, and questionable financial transfers. Another application requests a preliminary injunction, an order to repatriate customer assets, a prohibition on record destruction by the defendants, and more.

If approved, the order would require Binance to transfer all customer assets to new wallets accessible only by Binance US within 30 days and ensure only Binance US has access to customer funds within five days. In response, Binance US tweeted that user assets remain secure, with its lawyers providing information to the SEC to address concerns.

The SEC's arguments reiterated in the filing include allegations that Binance had access to Binance US funds and a purported intention to evade U.S. regulators. The SEC also expressed concerns about BAM Trading's ability to properly custody assets, noting the company only formalized its handling practices last month, coinciding with the SEC's inquiries. 

In its original lawsuit, the SEC claimed that Binance allowed two companies linked to CZ, Sigma Chain and Merit Peak, to access "billions of U.S. dollars" of customer funds held by BAM Trading. Binance countered that user funds on Binance US were never at risk, maintaining that all assets on Binance and affiliate platforms are secure.