On June 6, the United States Securities and Exchange Commission (SEC) took legal action against Binance, Binance.US, and CEO Changpeng Zhao (CZ), filing an emergency motion in the District of Columbia U.S. District Court. The SEC's motion sought a temporary restraining order and outlined eight actions it requested to be taken.
One of the key requests made by the SEC was to freeze the assets of Binance.US and facilitate the repatriation of fiat and cryptocurrency held on behalf of U.S. customers. The motion also sought to prevent the destruction, alteration, or concealment of records related to the case. The SEC emphasized the need for expedited action due to concerns regarding customer asset safety and the potential dissipation of assets in light of Binance's history of alleged violative conduct, disregard for U.S. laws, evasion of regulatory oversight, and unresolved questions regarding financial transfers and customer asset custody and control.
Accompanying the motion was a proposed order awaiting the judge's approval. The proposed order outlined several conditions, including the transfer of assets belonging to U.S. customers back to Binance.US within a timeframe of 10 days. Furthermore, the defendants were required to transfer all customer crypto assets to new wallets with new private keys held by BAM Trading officers and employees based in the United States. The proposed order stated that customer assets would remain redeemable, but transfers exceeding $100,000 would require special handling.
The defendants were also obligated to provide the SEC with a comprehensive list of customer fiat and crypto assets, as well as a list of Binance.US customers and their respective balances.
The SEC's legal action followed a previous lawsuit filed against Binance by the commission for alleged securities law violations. While Binance had dismissed many of these allegations as a "conspiracy theory," the SEC's motion sought to address these concerns through legal means.
In summary, the SEC's recent legal action against Binance, Binance.US, and CZ is aimed at safeguarding customer assets, preventing the dissipation of available assets, and addressing alleged violative conduct and evasion of regulatory oversight. The proposed order outlines specific actions to be taken, including asset freezes, repatriation of funds, and enhanced custody measures for customer assets.
Also read - Google Cloud Launches Free Generative AI Courses for Learning and Deployment
