Hassan Maishera
TL;DR
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The US SEC is seeking a restraining order to freeze assets belonging to Binance.US, the United States arm of the Binance crypto exchange.
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This comes roughly 24 hours after the regulatory agency filed a lawsuit against Binance and its CEO.
SEC Wants To Freeze Binance.US Assets
The United States Securities and Exchange Commission (SEC) has asked a court to grant it a temporary restraining order to freeze assets related to Binance.US.
The regulatory agency made this request on Tuesday, 24 hours after it filed a lawsuit against the parent company Binance and its CEO, Changpeng Zhao.
The SEC filed this in the the D.C. District Court, asking for approval to freeze assets tied to BAM Management US Holdings and BAM Trading Services, the holding and operating firms for Binance.US.
In its filing, the SEC said;
"The SEC respectfully submits that this relief is necessary on an expedited basis to ensure the safety of customer assets and prevent the dissipation of available assets for any judgment, given the Defendants’ years of violative conduct, disregard of the laws of the United States, evasion of regulatory oversight, and open questions about various financial transfers and the custody and control of Customer Assets – including by Defendants who claim they are not subject to the Court’s jurisdiction – as described in the Complaint, Memorandum of Law, and supporting materials.”
If the order is granted, Binance will have five days to ensure that only Binance.US has access to customer funds. The crypto exchange would also ensure that within 30 days, all customer assets would be transferred to new wallets that only Binance.US can access.
SEC Comes After Top Exchanges
Binance.US responded by assuring its users that their assets remain safe and secure. Furthermore, the crypto exchange has provided information to the SEC regarding fund safety concerns.
The SEC maintains that Binance continues to have control over customer assets on Binance.US. The regulatory agency wrote;
"Even to the extent they retain control over Binance.US Platform customers’ crypto assets, BAM Trading’s recent assertions raise concerns about its ability to properly custody them. BAM Trading has operated the Binance.US Platform for over 3.5 years, yet it only implemented formal policies for handling crypto assets last month (a timing that corresponds to when the SEC was asking about precisely those practices)."
The SEC has come after two leading cryptocurrency exchanges within the space of 24 hours. The securities regulator sued Binance and its CEO on Monday for allegedly violating securities law in the United States.
This was followed by a lawsuit against Coinbase on Tuesday, with the SEC claiming that the crypto exchange is operating as an unregistered broker.
