Binance might not have to completely shut down its U.S.-facing digital asset exchange while it defends against a federal securities lawsuit, depending how the next few days go.
On Tuesday, U.S. District Judge Amy Berman Jackson held a hearing in a District of Columbia court to consider whether to grant a Securities and Exchange Commission (SEC) emergency request to freeze the assets of Binance.US, the U.S.-facing offshoot of Binance Holdings Limited (BHL), operator of the international Binance.com exchange.
The SECâs request followed last weekâs filing of 13 civil charges against Binance and its founder Changpeng âCZâ Zhao for, among other things, offering unregistered securities to U.S. customers and funneling Binance.US customer cash out of the country to CZ-controlled entities as part of a âcalculated evasionâ of U.S. law.
The SECâs suit provided ample evidence that the purported leaders of Binance.US were in reality CZâs puppets and that he was in control of the U.S. exchangeâs bank accounts as well as its customersâ digital assets. As such, the SEC sought an emergency asset freeze enforcement action to prevent CZâwho appears to enjoy taunting U.S. authorities from Dubai as to their lack of jurisdiction over himâfrom draining those accounts dry.
On Monday, Binanceâs legal representatives filed two proposals they hoped would satisfy the SEC without freezing the U.S. cryptocurrency exchangeâs assets. One of these proposals was filed by the team representing BHL and CZ, the other by the team representing BAM Trading Services and BAM Management US Holdings, the CZ-controlled companies that claim to be in charge of Binance.US.
(These dual filings are apparently intended to maintain the illusion that Binance.US is an independent entity. This is despite documented evidence that its CEOs couldnât even buy branded hoodies for staff without CZâs say-so, and that CZ and his minions could move hundreds of millions out of Binance.US bank accounts without even informing said CEOs.)
Early Tuesday, Judge Jackson issued an order instructing the defendants to provide the court with a list of the differences between these two proposals. Jackson also ordered the SEC to inform the court âwhat changes need to be made ⊠to allay the SECâs concerns regarding assets in the United States and render the order acceptable to the government.â Jackson cautioned all sides not to submit any âadditional argument or explicationâ at this time.
