TL;DR Breakdown
- Binance lawyers strongly oppose SEC’s restraining order, citing a lack of immediate risk to customer assets.
- Concerns raised by the SEC have already caused harm, argue Binance’s legal representatives.
- Strained banking relationships force Binance.US to shift to a cryptocurrency-only model.
Lawyers representing Binance and its associated firms have vehemently opposed the restraining order sought by the U.S. Securities Exchange Commission (SEC) in a recent court filing on June 12.
The SEC had charged Binance and related companies with various allegations on June 5 and subsequently requested a restraining order against Binance.US—the order aimed to freeze the company’s assets and enforce the return of user funds.
In their response, Binance’s legal representatives questioned the necessity of the SEC’s requested relief, arguing that the SEC failed to demonstrate any immediate risk to customer assets. They further emphasized that the concerns raised by the SEC had already initiated the harm the regulatory body aims to safeguard against.
Of particular concern was the reported threat by banking partners of Binance.US’s parent company, BAM Trading, to restrict access to corporate and customer assets. Binance’s lawyers asserted that granting the restraining order would disproportionately harm BAM’s customers and effectively terminate the company’s operations. Additionally, they highlighted the adverse impact on BAM’s ability to mount a vigorous defence in the court.
Recently, Binance.US discontinued U.S. dollar transfers and transitioned into a cryptocurrency-only exchange model starting on June 13. This move was prompted by strained banking relationships, as advised by the company to its users, urging them to withdraw their U.S. dollar balances before the specified date. Binance’s legal team contended that “there is no risk to BAM’s customer assets” and no emergency apart from what had been created by the SEC.
Furthermore, the lawyers revealed that BAM Trading had already agreed not to transfer assets to Binance Holdings Limited, Binance CEO Changpeng Zhao, or related parties. They emphasized that the requested restraining order lacked a direct connection to specific alleged violations and underscored the U.S.’s absence of jurisdiction over Zhao, Binance Holdings Limited, and other associated parties.
Various associates filed additional affidavits supporting and opposing the SEC’s restraining order. These documents stressed that Binance Holdings Limited, Zhao, and other relevant entities could not access funds held by U.S.-based Binance companies.
The legal dispute between Binance and the SEC continues to unfold, with the opposing arguments shedding light on the potential ramifications for Binance’s customers and overall business operations. As the case progresses, the outcome remains uncertain, and market participants closely watch for further developments in this high-profile legal confrontation.
Besides contesting the restraining order, Binance’s lawyers emphasized the absence of immediate risk to customer assets, warned about the potential harm caused by the SEC’s concerns, and disputed the SEC’s jurisdiction over crucial individuals and entities. Moreover, they highlighted the detrimental consequences the restraining order could have on BAM’s customers and business.
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