Binance.US and the US Securities and Exchange Commission (SEC) have been forced by Judge Amy Berman Jackson to work out a compromise. Its goal is to protect the exchange’s customer funds without freezing them.
Binance’s advantage at the start of the process
Binance.US and the U.S. Securities and Exchange Commission (SEC) have decided to work together to avoid freezing all of the exchange’s assets.
On June 14, reports from Bloomberg shook up the market, reporting the decision of Judge Amy Berman Jackson, who ordered the two sides to meet with a mediator to reach a compromise that would protect customer funds without shutting down the platform.
“A complete shutdown of the exchange would have serious consequences not only for the company itself, but for the broader digital asset markets as well.” – voiced Jackson at the June 13 hearing.
Judge Jackson decided not to issue a final ruling on the SEC’s initial motions until both sides had consulted with a mediator to determine how to proceed.
The market sees this event as the first win in favor of the crypto market. Recall that one of the SEC’s first requests to the court was to freeze all assets held on the Binance.US platform. As you can see, the judge absolutely refused to accept such a proposal.
CZ with a potential restraining order against the exchange
Before Judge Jackson made her decision, former SEC lawyer John Read Stark shared on Twitter with his twenty thousand followers that there was a “huge conflict over what each side wanted to achieve at the hearing”.
“However, the judge has the ability to order a compromise and find common ground,” – Stark explained.
In a related development, on Tuesday, June 6, the SEC filed an emergency motion for a temporary restraining order against Binance.US its CEO, accusing Changpeng “CZ” Zhao of potentially compromising the platform’s customer funds.
SEC attacks without evidence
The regulator, it was claimed, had accused Zhao, Binance’s chief executive, of moving $12 billion in Binance funds through an entity called Merit Peak, which he controlled himself.
However, on the eve of the restraining order hearing, Binance.US and Zhao filed a joint memorandum denying accusations of fund mismanagement. They accused the SEC of being “unable to find any case” in which Binance.US customers’ funds were misused.
“In fact, there is no ‘crisis situation’ here, except one that the SEC has created for its own purposes.” – they declared emphatically.
