Binance.US Lost a Court Case Over Misleading SEC Statements
In Brief
A federal judge denied Binance’s attempt to limit the SEC’s use of terms referring to Binance.US’ handling of client money in press releases. The judge ruled that the SEC’s extrajudicial statements were not misleading.
Binance.US, operated by BAM Trading, recently faced a legal setback as Federal Judge Amy Berman Jackson denied its request to limit the Securities and Exchange Commission’s (SEC) use of specific language related to Binance.US’s handling of client funds in its press releases.
Binance’s legal team filed a complaint on Friday, objecting to the SEC’s press releases. They argued that the SEC’s extrajudicial statements were misleading, particularly its description of alleged mismanagement of user funds. The SEC claimed that CEO Changpeng Zhao controlled investment entities that received diverted or commingled funds from the trading platforms.
Judge Amy Berman Jackson, of the District of Columbia District Court, rejected these allegations. She declared that the court’s role was not to edit public statements from any of the parties involved in the case. She also asserted that court intervention wasn’t necessary at this point and that it was unclear whether the SEC’s public relations efforts would materially impact the case proceedings.
SEC vs Binance.US
Binance.US’s legal team had previously requested that the judge censure the SEC outside of court for its characterization of the alleged mismanagement of billions of dollars in client funds, arguing that such statements could potentially bias a jury. However, this request was denied.
The SEC filed a lawsuit against Binance, Binance.US, and Changpeng Zhao on June 5, alleging that the exchanges provided unregistered securities to US users. It also claimed that Binance had failed to register as an exchange or a broker-dealer clearing agency. Initially, the SEC had requested the court to freeze all assets of Binance.US, but later settled for a compromise allowing only the exchange’s employees to access customer funds.
- Binance.US attorneys have argued against the US Securities and Exchange Commission’s (SEC) request for a temporary restraining order to freeze its assets. The team for Binance.US and CEO Changpeng Zhao stated in a court filing on Monday that customer assets were not at risk, dismissing the SEC’s claims as an “emergency.” The attorneys further contended that compliance with the SEC’s proposed measures would harm Binance.US customers and effectively shut down the business operations of Binance.US.
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- The Battle for Control: Binance.US and Changpeng Zhaos Stake
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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
