Binance.US and SEC Engage in Talks to Protect Customer Funds, Avert Asset Freeze

Binance.US and SEC Engage in Talks to Protect Customer Funds, Avert Asset Freeze

Binance.US and the United States Securities and Exchange Commission (SEC) are actively engaged in negotiations to secure an agreement that safeguards customer funds and prevents a complete freeze of assets. This comes after U.S. District Judge Amy Berman Jackson referred the case to a magistrate judge, as reported by Bloomberg.

SEC/Binance Newsflash: Dueling Consent Orders (Read Them Now)

The SEC and the Binance defendants have each submitted draft orders of what each party wants the Judge to order in the SEC/Binance Emergency Asset Freeze Enforcement Action.

There is obviously a lot of conflict… pic.twitter.com/UWjXSgL5lR

— John Reed Stark (@JohnReedStark) June 13, 2023

Judge Jackson expressed her concerns about the extensive consequences that a complete shutdown would have not only on Binance.US but also on the overall digital asset markets. Despite this, she expressed optimism, noting that the SEC and Binance.US were not too far apart in their positions and could potentially find common ground to reach a resolution.

Former SEC enforcement attorney John Read Stark acknowledged the conflicting interests at stake but highlighted that the judge could still order a compromise and facilitate a resolution between the parties involved.

The ongoing negotiations were brought to the forefront when John Read Stark shared a tweet revealing that the SEC and Binance defendants had submitted draft orders, outlining their respective desires in the SEC/Binance Emergency Asset Freeze Enforcement Action.

On June 6, the SEC filed an emergency motion for a temporary restraining order, alleging that Binance CEO Changpeng “CZ” Zhao had unauthorized access to Binance.US customer funds. The SEC claimed that Zhao had transferred $12 billion through his controlled entity, Merit Peak.

In response, Binance.US and Zhao jointly issued a memorandum strongly refuting any mishandling of funds. They challenged the SEC to provide evidence supporting their allegations and emphasized that not a single instance of misusing customer funds had been identified by the SEC.

The progress of negotiations with the magistrate judge is expected to be updated on June 12. This development brings hope for a resolution that will protect customer assets and address the concerns raised by the SEC, potentially averting a complete asset freeze on Binance.US.

The ongoing negotiations between Binance.US and the SEC demonstrate promising progress in finding a resolution that prioritizes the protection of customer funds while ensuring stability within the digital asset markets.