In a recent development in the ongoing legal battle between the U.S. Securities and Exchange Commission (SEC) and cryptocurrency exchange Binance and its U.S. trading platform, Binance.US, a federal judge has denied the SEC’s request for a temporary restraining order to freeze the assets of Binance.US. Judge Amy Berman Jackson of the D.C. District Court has instead called for continued negotiations between the parties involved.
The judge’s decision allows Binance.US to continue its operations while discussions on regulatory restrictions unfold. During the courtroom proceedings, Judge Jackson expressed her reluctance to impose a restraining order if the two sides could reach an agreement on limits and demonstrate the absence of any immediate need for such measures.
The SEC attorneys were questioned by the judge about their motion to freeze all of Binance.US’s assets until it could be proven that no one from Binance’s global platform, including Changpeng “CZ” Zhao, had access to its private keys. The judge emphasized the importance of understanding whether any Binance.US customer funds had left the U.S. and expressed frustration with the responses provided by the SEC attorneys.
Earlier in the day, the judge hinted that she may have been inclined to grant some form of restriction on Binance’s access to Binance.US assets, but not a full restraining order. She urged the companies to reconcile their proposed restrictions and asked the SEC to contrast its desired outcomes with the alternatives proposed by the companies instead of the restraining order itself.
In response to the SEC’s request for an asset freeze, Binance.US presented a compromise proposal aimed at addressing the regulatory concerns. The proposal involved transferring crypto assets belonging to U.S. customers to new wallets with new private keys exclusively controlled by officers based in the United States at Binance.US. This solution was intended to provide increased oversight and ensure that Binance’s global platform, including CZ, would not have access to these assets.
Furthermore, as part of the ongoing legal proceedings, Judge Jackson ordered Binance.US to submit a comprehensive list of its business expenses to the court. This requirement aims to gain better visibility into Binance.US’s financial operations and provide the court with necessary information for further evaluation.
The judge emphasized that the parties were not far apart in their positions and encouraged them to find an agreement that would address the concerns raised by the SEC while allowing Binance.US to continue its operations. Both the SEC and Binance.US expressed a willingness to continue operating, and Binance.US emphasized its desire to be allowed normal operating expenses, stating that it was “not willing to accept the death penalty” represented by a total asset freeze.
In conclusion, Judge Amy Berman Jackson has denied the SEC’s request for an asset freeze on Binance.US, allowing the exchange to continue its operations for now. The judge has called for ongoing negotiations between the parties involved and has requested additional information from Binance.US regarding its business expenses. The court aims to strike a balance between regulatory concerns and the continuity of Binance.US’s operations as the legal proceedings continue.
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