Binance US Fights Back Against SEC
Binance US fights SEC's restraining order claim, warns it could shutter its operations.
Binance US has requested the court to dismiss the SEC's proposed temporary restraining order against its assets, claiming it would effectively shut down its operations. The firm critiqued the SEC's action in a June 12 filing as excessive and unnecessarily oppressive.
A hearing on the restraining order is set for June 13 in the U.S. District Court for the District of Columbia. Binance US maintained that the order would effectively end BAM Trading Services Inc., the entity operating crypto trading for Binance US, emphasizing that it would primarily harm BAM’s customers.
Binance US also criticized the SEC's entire legal strategy, arguing that "all of the SEC’s claims fail" as the regulator has not yet "identified a single security trading on BAM’s platform." The company argued that cryptocurrency is not a foregone conclusion as a security, and that the SEC's inaction over years of operation by many crypto exchanges contradicts this claim.
Furthermore, the firm stated it had extensively cooperated with an ongoing SEC investigation since Dec. 20, 2020, producing more than 700,000 individual communications and detailed data on its operations.
The SEC launched legal action against Binance and affiliates on June 5, accusing them of failing to register as a securities exchange and enabling U.S. customers to trade cryptocurrencies deemed as securities. The SEC also accused Binance CEO Changpeng Zhao (CZ) of controlling Binance US customer funds and of transferring $12 billion through a private entity, Merit Peak.
On June 6, the SEC sought a temporary restraining order against Binance, demanding a freeze on Binance US assets until the firm could demonstrate that CZ or other executives couldn't move these funds.
Despite refuting the SEC’s accusations on social media, this is Binance's first official response. The joint memorandum claimed that the SEC couldn’t “identify a single instance of mishandling or misuse of BAM customer assets,” concluding that there is no 'emergency' as alleged by the SEC.
