SEC Files Emergency Action to Freeze Binance.US Assets
On Tuesday, the U.S. Securities and Exchange Commission (SEC) filed an emergency action to freeze the assets of crypto exchange Binance's U.S. subsidiary, repatriate the assets held on behalf of its customers, and seek other emergency relief actions against other Binance-affiliated entities.
The SEC has requested an emergency order from a federal judge in Washington, D.C., to freeze the assets of Binance's U.S. subsidiary, known as Binance.US. The SEC alleges Binance and its founder, Changpeng Zhao, have demonstrated a «disregard» for U.S. law.
The order, if granted, would require the company to send any money back to the U.S. that is being held elsewhere for U.S. customers. The freezing order would specifically apply to Binance's two U.S. holding companies and accounts held at various financial institutions, while the non-U.S. regulated international exchange would be exempt.
The SEC's move comes after it filed a lawsuit against Binance and Zhao, accusing them of fraudulent activities, improper commingling of funds, and operating as an unregistered securities exchange.
The SEC said the emergency restraining order is necessary to prevent the dissipation of assets given Zhao and the company's alleged history of violating U.S. laws. Additionally, the order requires Zhao and his two holding companies to justify why a preliminary injunction should not be imposed on them and prohibits the destruction of evidence by all three entities.
The filing from the SEC contains an exception for BAM Trading Services Inc., to continue transferring customer assets for the purpose of processing user withdrawals, as long as they are not the assets of any Binance-related entity.
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