The U.S. Securities and Exchange Commission (SEC) is pulling no punches in its battle to bring down Binance and its executives.
In a filing to the U.S. District Court for the District of Columbia on June 6, the SEC requested that the assets of Binance.US be frozen.
Binance.US Assets Under Scrutiny
An “order freezing the assets of defendant BAM Management and BAM Trading” has been requested by an emergency motion by the plaintiff, the SEC.
BAM Management and Trading are the firms that Binance and Binance.US use. The SEC sued Binance earlier this week for securities law violations.
In addition to freezing Binance.US assets, the SEC also filed an order “directing defendants to repatriate assets held for the benefit of BAM customers.”
The SEC wants the assets available to pay fines and to prevent Binance from moving them to another jurisdiction.
“An order freezing BAM’s assets is necessary to preserve the status quo, prevent dissipation or transfer of those assets from the jurisdiction of this Court, and protect this Court’s ability to award relief in the form of disgorgement, prejudgment interest, and civil penalties.”
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If this request is granted, the only losers will be Binance.US customers—the people the SEC claims to protect.
There was also an order to prevent the destruction of documents by Binance.US. Additionally, the SEC wanted the defendants “to show cause why a preliminary injunction should not be granted.”
It doesn’t end there. The SEC also wants expedited discovery to dispatch its investigators and dissect the company.
“For the next 60 days, the SEC may conduct expedited discovery of Defendants and third parties concerning the Customer Assets and their security, segregation, availability, and any encumbrances or limitations that would make them unavailable for transfer or withdrawal by customers.”
However, it appears that the real story behind the war on crypto has emerged. SEC Chair Gary Gensler simply doesn’t see the need for digital assets and believes that the dollar should suffice.
Binance Responds
On June 7, Binance.US responded, reassuring customers to prevent a crypto exodus.
“User assets remain safe and secure and the platform continues to be fully operational with deposits and withdrawals functioning as normal.”
It added that the preliminary injunction filing is “unwarranted.” It is based on “the SEC Staff obtaining an advantage in litigation versus genuine concern about the safety of customer assets,” it stated.
A bank run on Binance.US caused by the SEC could jeopardize the safety of customer assets. This was alluded to with the firm stating:
“Until recently – despite years of engagement – the SEC Staff has not expressed a concern about the safety of customer assets.”
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