Binance lawyers say SEC’s restraining order will do the damage it aims to prevent
The SEC's request could potentially lead to the breakdown of U.S. banking relationships and restrict access to funds.
Lawyers for Binance and related firms submitted a court filing on June 12 expressing opposition to a restraining order currently sought by the U.S. Securities Exchange Commission (SEC).
Binance objects to the restraining order
The SEC filed charges against Binance and related companies on June 5. It then sought a restraining order against Binance.US to freeze company assets and repatriate assets held for the benefit of customers.
Now, Binance’s lawyers have objected to the SEC’s order, writing:
“Without … showing that customer assets are currently at risk, the SEC has not demonstrated any purpose for the requested relief. And worse, [the SEC’s concerns] have already begun to cause the exact harm the SEC is supposed to protect against.
Lawyers said that banking partners of Binance.US’s parent company, BAM Trading, have threatened to prevent the firm from accessing corporate and customer assets.
Those lawyers added that the restraining order would “primarily harm BAM’s customers and effectively end BAM’s business” and damage its ability to defend itself in court.
Binance.US previously announced that it would halt U.S. dollar transfers and transition to a cryptocurrency-only exchange model on June 13 due to those failing banking relationships. It advised users to withdraw their U.S. dollar balances before then.
Lawyers say user funds are otherwise safe
Binance’s lawyers said elsewhere in the filing that “there is no risk to BAM’s customer assets” and no emergency apart from what the SEC has created.
Lawyers said that BAM Trading has agreed not to transfer assets to Binance Holdings Limited, Binance CEO Changpeng Zhao, or other related parties. Furthermore, they said that the requested restraining order is unrelated to specific alleged violations and noted that the U.S. lacks jurisdiction over Zhao, Binance Holdings Limited, and related parties.
Other associates also filed declarations to express opposition to the requested restraining order. Some of those documents asserted that Binance Holdings Limited, Zhao, and others could not access funds held by U.S.-based Binance companies.
Update: This piece previously suggested that funds held for the benefit of customers would be returned to customers rather than repatriated in general.