Customers are worried about their funds as the SEC vs Binance saga unfolds
The U.S.-based subsidiary of the global crypto exchange Binance said it is “fully operational with deposits and withdrawals functioning as normal” and reassured its clients that “user assets remain safe and secure,” although the United States securities regulator is currently seeking to freeze its assets “on an expedited basis.”
We have earlier reported that SEC sued Binance and its CEO Changpeng Zhao for engaging “in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law.” The list of allegations is long, with thirteen charges laid out on 136 pages.
Right after that, the SEC filed an emergency motion in the District of Columbia U.S. District Court asking for a temporary restraining order against Binance, Binance.US and Binance CEO Changpeng Zhao (CZ). In particular, the regulator requested to freeze Binance.US corporate assets and repatriate all fiat and cryptocurrency held by U.S. customers or for the benefit of U.S. customers.
Despite some worries emerging among the crypto community, the emergency motion from the SEC is not expected to directly impact the customers’ ability to withdraw their funds from the exchange. Besides, it will still require a district judge’s approval to proceed.
Binance again expressed its disappointment with the SEC’s aggressive actions, occurring in spite of “the information the company has provided to ensure SEC Staff of the safety of customer assets” and its overall readiness to cooperate with the regulator.
At the same time, the exchange doesn’t lose its strong intention to defend itself in court, claiming that “The filing of the preliminary injunction is unwarranted and based more on the SEC Staff obtaining an advantage in litigation versus genuine concern about the safety of customer assets.”
Except for targeting Binance, SEC almost simultaneously sued another major crypto player – Coinbase – for allegedly selling unregistered securities. This lawsuit comes two and a half months after Coinbase received a Wells notice from the regulator and prepared itself for a lengthy court battle with SEC.