In a filing on June 12, Binance.US criticized the SEC's motion, calling it "draconian and unduly burdensome" and stating that it would effectively end its business. The hearing on the temporary restraining order is scheduled for June 13.
Binance.US argued that granting the restraining order would force the closure of BAM Trading Services Inc., the entity that provides cryptocurrency trading and exchange services for Binance.US. The filing stated that the requested relief would primarily harm BAM's customers, put BAM out of business, and prevent BAM from defending itself in the litigation.
The cryptocurrency exchange also criticized the SEC's approach, asserting that all of the SEC's claims fail because the regulator has not yet identified a single security trading on BAM's platform. The SEC has alleged that at least 68 cryptocurrencies are securities. Binance.US stated that the SEC's claim that cryptocurrency is a security is not a foregone conclusion and that the fact that cryptocurrency exchanges, including BAM, have operated in the United States for years without SEC interference contradicts the claim that they are clearly covered by securities laws.
Furthermore, Binance.US mentioned its significant efforts to cooperate with an ongoing SEC investigation initiated in December 2020. The filing stated that the investigation has produced over 700,000 individual communications and "bespoke data" on the exchange's day-to-day operations.
The SEC filed a major legal action against Binance and its affiliates on June 5, accusing the crypto exchange of failing to register as a securities exchange and allowing U.S. customers to trade cryptocurrencies that the SEC claims are securities. The regulator also accused Binance CEO Changpeng Zhao (CZ) of having access to Binance.US customer funds and alleged that he moved $12 billion in Binance's funds through a privately-controlled entity called Merit Peak.
In response, the SEC filed an emergency motion for a temporary restraining order on June 6, seeking to freeze assets held on Binance.US until the exchange could prove that the funds could not be moved by CZ or any other Binance executive.
Binance and Binance.US have denied the SEC's claims on social media, and the recent filing marked their first official comment regarding the accusations. The joint memorandum argued that the SEC failed to provide evidence of mishandled or misused customer assets and emphasized that there is no real emergency except the one manufactured by the SEC for its own purposes.
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