Federal Judge Postpones Temporary Restraining Order, Binance Lawsuit Or Turnaround?
Original author:Nikhilesh De, Jesse Hamilton
Original compilation: Jordan, PANews
Original compilation: Jordan, PANews
The Binance lawsuit turned around: the judge rejected the asset freezing order, or can it really reach a settlement with the SEC?
On June 14, the federal judge overseeing the SEC case against Binance and Binance.US declined to order a temporary restraining order freezing assets of the exchange’s U.S. trading platform, which would allow Binance.US to continue doing business while working with Further communications with regulators.
According to Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia, there is "absolutely no need" for a restraining order if the parties can agree on restrictions. At the same time, the judge also ordered Binance.US to provide the court with a list of its business expenses and asked the two parties to continue negotiations.
In court, Judge Amy Berman Jackson responded to a motion by SEC lawyers to freeze all assets of Binance US, arguing that enforcement of the motion would require proof that Binance Global, including Changpeng Zhao, No one on the s can access its private key.
Asked during the trial whether any Binance.US customer funds had actually left the U.S., Judge Amy Berman Jackson seemed unsatisfied, and even frustrated, by the SEC lawyers' answers, given that several previous SEC Lawyers said their main concern was that Binance Global Exchange controlled enough private keys to move the funds.
Amy Berman Jackson's question was also very direct: "I wonder if it's happening, mind you, I've asked each of you that question."
Key Points in the Binance Lawsuit
Earlier in the day, Judge Amy Berman Jackson seemed to suggest that she may be inclined to impose some degree of restrictions on user access to Binance, Binance.US assets, but not a comprehensive restraining order. In addition, Amy Berman Jackson also asked Binance to further coordinate with the US Securities and Exchange Commission on the restraining order, and also ordered the US Securities and Exchange Commission to replace the restraining order with "other materials".
U.S. Securities and Exchange Commission attorney Jennifer Farer told Judge Amy Berman Jackson on Tuesday local time, "We are open to allowing Binance to continue to operate." Operating funds, but not willing to accept the "death penalty" at the cost of asset freezing.
Jennifer Farer added that Binance.US' statement on how to hold encrypted assets and funds has been changing. At first, the US Securities and Exchange Commission had hoped to reach an agreement with Binance, but Binance.US told the US Securities and Exchange Commission that the relevant agreement was not operable. The "unworkable agreement" between the two parties was shelved.
Jennifer Farer also said that Binance.US had previously told the US Securities and Exchange Commission that they might stop doing business in the United States, so the US Securities and Exchange Commission had to urgently issue a restraining order. Jennifer Farer said: "The question of whether Binance.US is closed or not is constantly changing." In addition, the US Securities and Exchange Commission stated that Binance.US currently covers $2.2 billion in encrypted assets, and freezing its assets will not Impact on the company's larger global exchange.
Based on the above, Judge Amy Berman Jackson believes that the differences between Binance and the SEC are actually not that big. If they can reach an agreement, it will give the parties time to properly sort out the details of the case.
Conceptual Issues at the Heart of the Binance Lawsuit: Securities vs. Commodities
Last week, the SEC sued cryptocurrency exchange Binance.US and Binance founder Changpeng Zhao “CZ,” accusing them of operating as an unregistered securities exchange, brokerage, and clearinghouse. The regulator also accused Binance of allegedly commingling large amounts of funds, enabling Changpeng Zhao, a Canadian national living in the UAE, to gain access to Binance.US customer assets.
Following the filing of the lawsuit, the SEC filed a motion for a temporary restraining order with the court. In its response to the restraining order motion, Binance disputed the claims, arguing that the SEC had not conclusively proven that they listed any securities, and saying the regulator had not presented any evidence in support of the emergency motion.
On the other hand, Judge Amy Berman Jackson also delved into the conceptual issues at the heart of the Binance lawsuit: what would make a crypto asset a security, and if it wasn’t a security, would it be a commodity? Judging from the answers, she was not satisfied with the answers given by the SEC lawyers.
As the hearing was about to begin, Judge Amy Berman Jackson asked SEC lawyers to distinguish between "crypto assets" and "crypto asset securities." SEC attorney Matthew Scarlato told the judge that in the broader complaint, the regulator provided several examples of cryptocurrencies it considered securities, but also reserved the right to evaluate the rest of the exchange’s tokens later.
Judge Amy Berman Jackson further questioned attorney Matthew Martens representing Binance.US — “Is BNB a commodity? Because the SEC says it is a security.”
latest progress
Matthew Martens' answer is simple: "BNB is a crypto asset."
latest progress
In a compromise proposal filed with the court, the SEC ordered Binance.US to repatriate client assets to the U.S., where they would be placed under the control of entities unrelated to CZ and could process redemptions for clients.
In response to a request by the U.S. Securities and Exchange Commission (SEC) to freeze assets, Binance.US has proposed a compromise that includes transferring U.S. customers’ crypto assets to new wallets with new private keys, managed by Binance.US US-based executives have sole control. As part of its proposal, Binance.US also asked for permission to continue paying employee salaries and covering operating costs, while promising not to transfer any assets or make any payments to benefit any Binance.US entity without a judge order.
