SEC Moves to Temporarily Freeze Binance.US Customer Assets to Protect Investors Within 5 Days_ Withdrawals and Assets From Binance.com Remain Unaffected

The US Securities and Exchange Commission (SEC) was recently reported to have filed a lawsuit against Binance and its CEO Changpeng Zhao for offering unregistered crypto securities without the appropriate licenses.

The exchange was further accused of assisting US customers to circumvent controls despite its public claims of blocking access to such users. In a new update, SEC has asked the D.C. District Court for a temporary restraining order to freeze the assets linked to BAM Management US Holdings and BAM Trading Services, the holding and operating firms for Binance.US

In another filing, the SEC seeks an order to “show cause why a preliminary injunction should not be granted.”

The SEC respectfully submits that this relief is necessary on an expedited basis to ensure the safety of customer assets and prevent the dissipation of available assets for any judgment, given the Defendants’ years of violative conduct, disregard of the laws of the United States, evasion of regulatory oversight, and open questions about ious financial transfers and the custody and control of Customer Assets – including by Defendants who claim they are not subject to the Court’s jurisdiction – as described in the Complaint, Memorandum of Law, and supporting materials.

Additional Orders Against Binance

There are additional orders including asking the defendant to repatriate assets controlled or “held to the benefit of BAM customers,” and an order that prohibits the destruction of records by the defendant

This filing was a huge cause for concern for users, however, Binance.US has clarified and assured that customers’ assets are safe and secured. Also, its lawyers have provided the necessary information to the Commission in a bid to address safety concerns of funds.

Once the order is approved, the company will have up to five days to make sure that the customers’ funds are only accessible by Binance.US. In 30 days, the company would have to transfer all customers’ funds to a wallet only accessible by Binance.US

In the lawsuit, SEC accused CZ of establishing two companies – Sigma Chain and Merit Peak, to access the funds of customers held by BAM Trading. This was reiterated in the memorandum of law filed immediately after the temporary restraining order application. It was further repeated that CZ made calculated attempts to evade the regulators

Binance has in response to the lawsuit stated that users’ funds on Binance.US were never at risk. The company also assured its customers that it would defend against any allegations raised by the SEC.

In the lawsuit, SEC listed 12 tokens as securities including Solana, Polygon, and Cardano. SEC Chair Gary Gensler earlier stated that any other crypto apart from Bitcoin is a security