Bitrabo Editorial
Binance.US and the Securities and Exchange Commission (SEC) are working together to find a solution that would prevent a complete freeze of assets on the cryptocurrency trading platform.
The SEC had requested an asset freeze on Binance.US, accusing the trading platform, owned by Binance Holdings founder Changpeng Zhao, of mishandling customer funds, misleading investors and regulators, and violating securities regulations.
Binance.US has been fighting the SEC’s lawsuit and arguing that customer assets are safe. They believe that blocking all funds would severely impact their business and negatively affect their customers.
Federal Judge Calls For Compromise In Binance.US Asset Freeze Battle
According to a Bloomberg report, US District Judge Amy Berman Jackson suggested that there is potential for a compromise to protect billions of dollars of customer funds while allowing the exchange to continue operating during the SEC’s lawsuit. She referred both parties to a magistrate judge to find a mutually agreeable solution.
Binance.US proposed a compromise that involves transferring US customer crypto assets to new wallets controlled solely by US-based officers. This would allow the platform to cover necessary business expenses such as rent, salaries, vendors, and software licensing.
The judge agreed with Binance.US’s argument that a complete shutdown would have significant consequences for the company and the digital asset markets. She emphasized that the details of the compromise should be handled by the magistrate judge.
In addition, Binance.US has requested permission to continue paying employees and covering operating costs as part of their proposal to avoid a complete asset freeze.
During the hearing, the SEC attorney expressed openness to a limited exception that would enable Binance.US to cover its operations. The regulator requested a breakdown of the exchange’s business expenses and professional fees to gain a better understanding of the requirements for the platform to continue operating. The judge ordered Binance.US to submit a list of its business expenses by Wednesday.
In its compromise proposal, the SEC asked Binance to repatriate customer assets to the US, where they would be under the control of entities independent of Binance Holdings founder Changpeng Zhao. These entities would handle redemptions for customers.
The negotiations between Binance.US and the SEC shed light on the challenges faced by the cryptocurrency industry and exchanges operating under increased regulatory scrutiny. The outcome of these negotiations will be closely watched by the industry as it aims to comply with regulations and maintain credibility in the market.
Featured image from Unsplash, chart from TradingView.com