Key Takeaways
- Binance states that there is no evidence of customer asset dissipation, commingling, or misuse by Binance.US.
- Binance is requesting an order from the court compelling the SEC to refrain from issuing public statements during the ongoing securities lawsuit.
Binance, one of the world’s leading cryptocurrency exchanges, and its CEO Changpeng Zhao (CZ) have filed a motion in court to prevent the U.S. Securities and Exchange Commission (SEC) from making what they allege are misleading statements.
“The SEC’s press release is misleading, contains statements that the SEC knows to be unsupported by evidence, and is inconsistent with the rules of professional conduct’, the motion alleges.
The motion, filed on June 21, accuses the SEC of releasing a press statement that contains unsupported claims and is inconsistent with professional conduct rules. In their filing, Binance and CZ reference SEC Enforcement Director Gurbir Grewal’s assertion that the exchange could potentially “commingle” or “divert” customer assets, as well as an order calling for all parties involved in the lawsuit to return to the United States.
The motion strongly denies these allegations, stating that there is no evidence of customer asset dissipation, commingling, or misuse by Binance.US (BAM). Moreover, Binance’s filing highlights that an agreement had been reached between the companies and the SEC on June 17 regarding a consent order governing the use of funds by Binance.US. However, shortly after the agreement, the SEC issued a press release, which Binance claims is misleading.
The SEC’s press release asserts that Binance and CZ had control over specific customer assets and could engage in commingling or diversion of those assets. The SEC also stated that these actions had already been alleged. However, Binance emphasizes that no ruling has been made on the SEC’s allegations. Binance and its affiliated companies, BAM Trading Services, and BAM Management US Holdings, maintain that there is no evidence of any funds being misused.
In response to the SEC’s press release, Binance and CZ expressed disappointment and caution that it could cause confusion in the market and potentially influence the jury pool. Consequently, the defendants are requesting an order from the court compelling the SEC to refrain from issuing public statements during the ongoing securities lawsuit that could significantly impact court proceedings.
If approved by a federal judge, this order would restrict the SEC from making statements that may materially affect the case’s outcome. Binance’s legal team has submitted a partial transcript of a June 13 hearing, during which the SEC’s counsel acknowledged the absence of evidence indicating that assets from Binance.US were being transferred offshore.
On June 5, SEC sued Binance and its CEO CZ, pressing 13 charges alleging that they worked to attract U.S. customers to its unregulated international exchange, commingled investor funds with their own, and violated securities laws.
