Binance.US has asked a court to reject the securities regulator's proposed temporary restraining order on its assets, claiming that such a move would “effectively wind up” its operations.
In a June 12 filing, Binance.US slammed the SEC's emergency motion for a temporary restraining order on its business, calling it “draconian and overburdening.” A hearing on the temporary restraining order is scheduled for June 13 in US District Court for the Dist rict of Columbia. Binance.US argued that the restraining order would force the closure of BAM Trading Services Inc., the entity that provided Binance.US with cryptocurrency trading and exchange services, stating:
"The relief requested would primarily harm BAM's customers, effectively put BAM out of business, and prevent BAM from defending itself in this lawsuit."
Notably, Binance.US took aim at the regulator's entire approach to legal action against it, claiming that “all SEC claims have failed” because the regulator has not “identified a single security trade on BAM's platform.” At the time of publication, the SEC claimed at least 68 cryptocurrencies were securities.
“The SEC says it's a foregone conclusion that a cryptocurrency is a security, but that's not the case. Numerous cryptocurrency exchanges, including BAM, have operated in the US for years without SEC meddling, unlike their clear It is contrary to claims that it is protected by the securities laws," the filing said. Additionally, Binance.US stated that it has made "significant efforts" to cooperate with the SEC's ongoing investigation that began on December 20, 2020. The results of the investigation yielded more than 700,000 personal communications and "data tailored to day-to-day operations," according to the filing. The SEC first filed major legal action against Binance and its affiliates on June 5, alleging that the cryptocurrency exchange failed to register as a securities exchange and al low UScustomers to trade cryptocurrencies it claimed were securities.
Additionally, regulators accused Binance CEO Changpeng Zhao (CZ) of having access to Binance.US customer funds, claiming that he moved $12 billion in Binance funds through a privately controlled entity called Merit Peak. The next day, June 6, the SEC filed an emergency motion for a temporary restraining order against Binance, seeking to freeze assets held by Binance. US until the cryptocurrency exchange can demonstrate that the funds cannot be accessed by CZ or Anyone transfer other executives of Binance.
While Binance and Binance.US denied the SEC’s allegations on social media last Monday, the joint memo filed with the filing marks the first official comment on the allegations. It argued that the SEC could not "identify a single instance of mishandling or misuse of BAM customer assets." "In fact, there is no 'emergency' here at all, other than ones created by the SEC for its own purposes," the memo added.
