- Binance.US and the United States Securities and Exchange Commission (SEC) are on a mission to negotiate an arrangement that prevents the cryptocurrency exchange from freezing its assets.
- The SEC accused Binance.US CEO, Changpeng “CZ” Zhao, of transferring $12 billion of the company’s funds via a controlled entity, an accusation that both Zhao and Binance.US have denied.
In a bid to shield customer funds and avert a full-scale asset freeze, Binance.US, the prominent cryptocurrency exchange, is working towards a mutually satisfactory arrangement with the United States Securities and Exchange Commission (SEC). U.S. District Judge Amy Berman Jackson has presided over the negotiations, pushing both entities towards a compromise that aims to sidestep a potential shutdown of the exchange, as reported by Bloomberg on June 14th.
— Capo WSB (@Capo_WSB) June 13, 2023
Judge Jackson, during a June 13 hearing, highlighted the significance of maintaining the operations of the exchange. She underscored the far-reaching consequences a total shutdown could have on the digital asset markets and the exchange itself. However, a definitive judgment on the SEC’s motion for a temporary restraining order is yet to be reached until both parties have collaborated on a resolution with the magistrate.
Emphasizing the closeness of the SEC and Binance.US to reaching an agreement, Judge Jackson scheduled an update on the compromise negotiations with the magistrate by the close of business on June 15th.
John Reed Stark, a former SEC enforcement attorney, prior to the hearing, voiced his insights on the prevalent discord between the desired outcomes of both parties to his 20,000 Twitter followers. Nonetheless, he suggested that the judge could facilitate a compromise and identify common ground.
Earlier on June 6th, the SEC, in an emergency motion for a temporary restraining order, accused Changpeng “CZ” Zhao, CEO of Binance.US, of accessing Binance.US customer funds. They alleged Zhao of maneuvering $12 billion of Binance’s funds via an entity he controls called Merit Peak.
In response to these allegations, both Binance.US and Zhao, in a joint memorandum submitted ahead of the restraining order hearing, denied any mishandling of funds. They questioned the SEC’s claims, emphasizing that the regulator could not pinpoint any instances where Binance.US customer funds were misused. They further argued against the existence of an ’emergency’ situation, asserting it as a construct of the SEC’s own making.