Binance.US and SEC told to reach compromise on restraining order Binance.US and SEC told to reach compromise on restraining order
Binance.US and BAM could escape an asset freeze and partial retain control over funds.
2 min read
Updated: Jun. 14, 2023 at 12:20 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Binance.US and the U.S. Securities Exchange Commission (SEC) could reach an agreement that could avoid a full asset freeze, Bloomberg said on June 13.
Judge demands compromise agreement
The SEC first filed charges against Binance.US and related companies on June 5. It then requested a restraining order and asset freeze on June 8.
Though the SEC’s initial order asked for Binance.US’s funds to be frozen and repatriated, Judge Amy Berman Jackson said at a recent hearing that freezing funds entirely would have “significant consequences.” She said that would not approve an asset freeze until both parties reach a compromise agreement with a magistrate judge.
Separate reports from Yahoo Finance suggest a June 15 deadline for that agreement.
The involved parties have also submitted a modified order that would allow Binance.US’ parent companies — BAM Trading and BAM Management — to keep control of user fiat and crypto assets solely for the purpose of facilitating customer redemptions.
The order would also allow BAM companies to pay ordinary business expenses; the SEC or the court would decide on specific details related to this in the future.
The revised order would, however, require BAM companies to transfer cryptocurrency funds to newly created wallets that are solely controlled by U.S. company members. Furthermore, BAM companies would be required to provide SEC counsel with details related accounts, balances, customers, and other information.
Those requirements relate to one of the SEC’s core concerns — namely the possibility that Binance CEO Changpeng Zhao and other executives and companies that exist outside of the U.S. have access to U.S. customer funds.
Binance.US has ended USD support
The order has not been approved in any form. However, Binance.US previously claimed that the mere request led its relationships with banking partners to break down.
Binance.US said that it would pause USD withdrawal channels and work solely with crypto as early as June 13. The platform’s status page indicates that all USD withdrawal methods are now disabled (apart from ACH transfers, which are labelled “degraded”).
That service change relates only to Binance.US and American customers. It does not relate to users of Binance.com or other global Binance users.
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Mike Dalton
Before transitioning to crypto writing in 2018, Mike studied library and information sciences. Currently, he resides on Canada's West Coast.
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