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Binance avoids US asset freeze despite SEC pressure
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By Nithya Bose in US business news, posted June 14, 2023
A federal judge has told the Securities and Exchange Commission and the US arm of Binance to negotiate an agreement which would allow the crypto firm to continue its operations.
The decision comes as a blow to SEC’s efforts to freeze the crypto exchange’s assets.
US District Judge Amy Berman Jackson addressed allegations of securities law violations.
Read More: SEC seeks asset freeze for Binance US units in regulatory lawsuit
The SEC sued Binance.US, its global affiliate Binance, and CEO Changpeng Zhao, accusing them of misusing customer funds, misleading investors, and evading disclosure rules.
During the court hearing, the SEC argued freezing assets was necessary to protect the $2.2 billion in US customer assets held by Binance.US.
It is due to the unclear relationship between the company and its international counterpart and conflicting statements from Binance about ownership and control.
Read More: SEC sues Binance for alleged illegal use of customer funds
Binance.US argued a freeze without exemptions for essential expenses, such as employee salaries and vendor payments, would harm its business and hinder its ability to mount a legal defense.
Judge Berman Jackson referred the SEC and Binance to an administrative judge to work out a potential agreement, with a status update expected by Thursday.
The SEC's actions against Binance are part of an escalating crackdown on the cryptocurrency industry.
Just a day after suing Binance, the agency sued Coinbase, the largest US crypto trading platform, alleging it had illegally failed to register under regulations apply to traditional investment entities.
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SEC Chairman Gary Gensler has warned about the crypto industry's noncompliance with existing laws since assuming his role two years ago, emphasizing a reckoning was imminent.
Following the collapse of former crypto trading giant FTX, Gensler has urged remaining companies to register with the agency promptly, cautioning time is running out.
In a recent speech, he reiterated this message to industry executives resistant to regulation, emphasizing disliking the message does not mean ignoring it.
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