Binance.US has opposed the U.S. Securities and Exchange Commission’s (SEC) motion for a temporary restraining order that seeks to freeze its assets. In a filing submitted on June 12, 2023, Binance.US labelled the SEC’s emergency application as “draconian and unduly burdensome,” claiming that it would effectively result in the company’s closure.
SEC/Binance Newsflash: Binance Fights Back
Binance, CZ and the BAM Defendants just filed lengthy opposition pleadings to the SEC’s emergency action. Find the links to two important pleadings below, which will give you a good idea of their defenses.
Should be an extraordinary… pic.twitter.com/qc5GRwHmjn
— John Reed Stark (@JohnReedStark) June 12, 2023
The cryptocurrency exchange argued that if the order were enforced, it would compel BAM Trading Services Inc., the entity supporting Binance.US, to cease operations. This would primarily harm BAM’s clients, hinder their ability to mount a legal defense, and effectively end the company’s operations.
Binance.US further criticized the U.S. SEC’s legal action, stating that the regulator’s claims lack merit since the regulatory agency as they have not specified any particular security being traded on BAM’s platform.
The company emphasized that the regulator’s claims that all cryptocurrencies are automatically classified as securities are inaccurate. They highlighted the fact that many cryptocurrency exchanges, including BAM, have been operating within the United States for years without interference from the SEC. According to the company, this challenges the notion that these exchanges should be subject to securities regulations by default.
Furthermore, Binance.US claims to have made substantial efforts to cooperate with an ongoing SEC inquiry initiated on December 20, 2020. The company stated that it has provided comprehensive data on its daily operations, including “bespoke data,” and over 700,000 unique communications as part of the investigation.
The U.S. SEC filed the lawsuit against Binance and its affiliates on June 5, 2023, alleging that they had allowed U.S. consumers to trade cryptocurrencies classified as securities without registering as a securities exchange. The regulator specifically pointed to a private company called Merit Peak, supervised by Binance CEO Changpeng Zhao (CZ), as the alleged location where $12 billion belonging to Binance was transferred.
Following the lawsuit, on June 6, 2023, the securities regulator submitted an emergency motion for a temporary restraining order to freeze the assets held on Binance.US until the cryptocurrency exchange could demonstrate that the funds were inaccessible to CZ or any other Binance executive involved in the case.
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