A court sitting in the US has denied the request of the Securities and Exchange Commission (SEC) to freeze the assets of Binance’s US subsidiary, Binance.US. The presiding judge, judge Amy Berman declined the request to freeze the exchange’s assets as investigations are ongoing.
The SEC made the request to the court only a day after suing Binance for violating securities laws. This was to enable the SEC carry out further investigations to prove its case against the exchange which has come under regulatory scrutiny.
The exchange has since made several adjustments, including delisting of trading pairs of crypto assets regarded as securities by the SEC. This was in an attempt to continue operation as the case is ongoing. Ohter adjustments include securing the assets of the exchange’s customers, giving the private keys to US personnel, and providing regular accounting for the assets, but the SEC rejected the proposal.
Fortunately for Binance, the ruled yesterday 13 June in US District Court for the District of Columbia that there was no need to freeze the assets of the exchange. This means the exchange will continue normal operations while the case proceeds and as things unfold.
Binance and SEC to Continue Negotiations
In the ruling, judge Berman said it was not necessary to issue a temporary restraining order, i.e the freezing of Binance’s assets if the two parties can agree on a compromise. The SEC and Binance therefore were ordered to continue negotiations and brief the court by Thursday next week.
The judges decision came after the SEC couldn’t present any evidence that Binance.US was transferring customers’ assets overseas. The judge also condemned the SEC’s approach of regulation by enforcement, saying it was “inefficient and cumbersome.” This comes as an exciting development for the crypto community worldwide.
Crypto influencers and lobbyists have also sent letters to the SEC as public opinion concerning the rule and the method the commission has employed in carrying out its duties. According to the letters, the SEC was going beyond its constitutional boundaries and may be infringing on the rights of citizens.
The SEC’s Enforcement Approach
The SEC has been keen on the crypto industry for long, but its approach has done more damage than good to the industry and US investors. Gary Gensler, the current SEC chairman has adopted a method that uses enforcement as its major approach of regulation.
The commission has sanctioned Coinbase, an indigenous US crypto exchange, as well as Binance. This was what led to the creation of Binance.US, an arm of Binance that is available to US customers, since they had been cut off from Binance global due to pressure from the SEC.
Gensler mostly claims to be protecting the US customers, but US customers themselves are not happy with this approach which is affecting them negatively as they try to invest.
Binance and SEC will brief the court on Thursday on their conclusion, which will be interesting to know as this will be an important aspect of the court proceedings. Should the SEC refuse to compromise, the court may be forced to make another decision which could favor the crypto exchange and community as a whole.
Meanwhile, other crypto exchanges are also making adjustments to ensure compliance so that the SEC doesn’t come after them.
