Bitrabo Editorial
The United States Securities and Exchange Commission (SEC) has filed an emergency motion for a temporary restraining order against Binance Holdings Limited, BAM Trading Services, BAM Management US Holdings, and Changpeng Zhao, following increased regulatory scrutiny in the crypto industry. The SEC seeks to freeze the assets of BAM Management and BAM Trading, direct defendants to repatriate BAM customer assets, and prohibit defendants from destroying records, among other relief. Alleging securities law violations, the SEC’s restraining order could freeze Binance.US assets until a hearing takes place. This is part of a wider crackdown on cryptocurrency companies that fail to comply with securities laws.
Binance.US Faces Order to Repatriate Assets
To prevent the dissipation or transfer of assets from the court’s jurisdiction and to protect relief awarding ability, the SEC orders the freezing of BAM assets and requires defendants to repatriate customer assets from Binance.US and the BAM platform. Additionally, the SEC seeks an order preventing the destruction, alteration, or concealment of records. Analyst Adam Cochran points out that the SEC’s motion seeks to repatriate assets held by Binance.US, potentially including deposits and Binance’s assets on behalf of the main exchange, indicating an escalation in regulation of the crypto industry as the SEC targets exchanges directly. The implications for the industry could be significant if regulators freeze assets held by exchanges, even if the exchanges themselves have not violated securities laws.
The outcome of the SEC’s motion against Binance.US could set a precedent for how regulators around the world treat crypto exchanges and trading platforms, which could make it more challenging for them to operate, and for investors to trade digital assets if the assets are frozen. Neither Binance nor CZ have responded to the SEC’s motion.
Image credit: Unsplash. Chart from TradingView.com.