US judge rejects SEC request for Binance.US to freeze assets for now

Washington, D.C. — The federal judge overseeing the US Securities and Exchange Commission’s case against Binance and binance It refused to issue a temporary restraining order to freeze the assets of the US trading platform.

This would allow the US arm of the company to continue doing business while removing restrictions with the regulator.

If the parties can agree on a boundary, there is “absolutely no need” for a restraining order, said Judge Amy Berman Jackson, of the D.C. District Court. Meanwhile, the judge ordered binance Submit a list of its business expenses to the court, and order the parties to continue negotiating. A status update is due by the end of work on Thursday.

In a packed Washington courtroom, a judge called out to SEC attorneys about their proposal to freeze all of the company’s assets until it can prove that no one from the global Binance platform, including Changpeng “CZ” Zhao, has access to its private keys.

At times, the judge seemed frustrated by the responses she was hearing when asked if there were any binance Customer funds have already left the US, after several SEC lawyers said they were mainly concerned about the fact that the global Binance exchange controlled enough private key shards to move funds.

“I want to know if this is happening or not,” she said. “It’s amazing that I asked each and every one of you this.”

Earlier today, the judge hinted that she may have been inclined to grant some sort of restriction on Binance’s access binance Assets but not a full restraint, ordering the companies to reconcile their proposed restrictions and ordering the SEC to compare what it wanted to what the companies had proposed rather than the restraining order itself.

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“We’re open to the company continuing to operate,” SEC attorney Jennifer Farrier told the judge Tuesday.

and my representative binance They said they mainly wanted to be allowed normal operating expenses and were “not willing to accept the death penalty” that a total asset freeze would represent.

Freer said binance He has constantly changed his story about how he holds crypto assets and funds, from binance He told the SEC that he had an agreement with Binance to say that the agreement was invalid to say that the non-operational agreement was suspended.

binance The attorney also told the SEC that it may stop doing business in the United States, warranting the need for an emergency order.

“There are disagreements about whether or not they are going to close,” Farber said.

Ultimately, Judge Jackson said, the sides were not so far apart. If they can come to an agreement, this will give all parties enough time to properly sort out the details of the case.

The SEC filed a lawsuit against Binance and binancealong with Binance founder Changpeng “CZ” Zhao, last week alleged that they were operating as an unregistered securities exchange, brokerage and clearing agency.

The regulator also alleged the massive commingling of funds allowed Zhao, a Canadian citizen living in the UAE, to access binance customer assets.

The SEC followed up the lawsuit with a motion for a temporary restraining order.

Cryptocurrency exchanges have disputed the allegations in their response to the move, arguing that the SEC has not definitively proven that they have listed any securities and saying that the regulator has not shown any evidence to support the emergency move.

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Securities versus commodities

Justice Jackson also dived into the foundational question at the heart of the lawsuit: What makes a crypto asset a security, and are they a commodity if they are not a security?

Although the judge asked some preliminary questions about the case, she was not satisfied with the answers.

Towards the opening of the hearing, the judge asked the SEC lawyers to distinguish between “crypto assets” and “crypto asset security.”

SEC attorney Matthew Scarlato told the judge that the regulator provided several examples of cryptocurrencies it believed to be securities in the broader complaint, but also reserved the right to value the rest of the tokens on the exchanges at a later time.

The judge asked the Securities and Exchange Commission (later Binance) whether other cryptocurrencies are commodities.

“The ones they don’t call securities, what are they?” she asked, diving into the heart of a problem that has troubled the crypto industry for years.

I later asked Matthew Martins, the attorney representing binanceif BNB is a commodity because the company has argued that it is a security.

“It’s a crypto asset,” Martins said.

“What is this? Nobody wants to tell me,” the judge noted.

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