- Binance.US’s legal team requests a halt to the SEC’s fraud investigation, citing lack of evidence.
- The SEC’s lawsuit and its impact on Binance.US’s financial status are major concerns for the company.
Blockchain expert John Reed Stark recently shared insights on Twitter about Binance.US’s legal strategy. According to his analysis of the latest court documents, Binance.US is assertively contesting the Securities and Exchange Commission’s (SEC) ongoing fraud investigation.
Breaking News: Judge Orders That The Condition Permitting CZ To Return To The UAE Pending Sentencing Is STAYED (i.e. CZ Must Remain in the Continental U.S. For Now)
(See Updated Compendium Below With Links To All Relevant DOJ/Binance/CZ Court Filings)
Yesterday, I predicted… pic.twitter.com/I6MmHkINv2
— John Reed Stark (@JohnReedStark) November 27, 2023
This situation involves a complex legal battle with Changpeng Zhao (CZ), the founder of Binance, and the U.S. Department of Justice (DOJ). Stark’s update, based on the latest court filings and highlighted by Coin Telegraph, suggests a complex legal scenario involving Binance’s founder Changpeng Zhao (CZ) and the U.S. Department of Justice (DOJ).
The SEC’s Allegations and Binance.US’s Defense
The SEC’s lawsuit, filed in June, accuses Binance and Binance.US of being involved in selling unregistered securities. The allegations include a supposed backdoor allowing Binance.US to control customer assets similarly to the controversial FTX case. However, during a recent hearing, Binance.US attorneys argued against these claims, stating there’s no evidence of asset misuse.
The case has severely impacted Binance.US, with its assets reportedly dropping by 90% and its user base halving since the lawsuit began. Amidst this financial turmoil, Binance and CZ agreed to plead guilty in a separate case with the DOJ, Treasury, and Commodity Futures Trading Commission, involving anti-money laundering law violations. This $4.3 billion settlement, however, did not address the SEC’s fraud-related claims.
Judicial Perspectives and Future Directions
Judge Zia Faruqui, overseeing the Binance and SEC case, expressed skepticism regarding the misappropriation of customer assets by Binance.US and CZ. His remarks during the hearing reflect a need to balance legal scrutiny with practicality. Judge Faruqui has urged Binance.US and the SEC to resolve their dispute, setting a deadline for an update by December 15.
In a related development, CZ is awaiting a court decision on whether he can leave the U.S. and return before his sentencing in February. The judge has temporarily restricted his travel to the UAE, with CZ potentially facing up to 18 months in prison under federal guidelines. This case stands as a significant chapter in the evolving narrative of cryptocurrency regulation and legal accountability.