SEC Asks to Freeze Binance.US Assets, Funds Are SAFU Says Binance

A day after slapping a lawsuit on crypto exchange Binance, the SEC requested the court to freeze the assets of Binance.US on Tuesday evening. The SEC also asked the judge to repatriate both fiat and crypto held by Binance.US’s customers.

The request for the freezing order applies to the Binance.Us companies and not to the exchange’s non-US entities. Besides, the order would also apply to dozens of accounts held by Binance.US at different banking institutions such as Axos Bank, Prime Trust, the defunct Silvergate Bank, and other institutions.

The SEC alleges that two foreign entities – Sigma Chain and Merit Peak – controlled by Zhao, are also involved in improperly comingling billions of dollars of customers’ funds, with Binance’s funds. SEC said that the immediate restraint order was necessary. It added:

This will “prevent the dissipation of available assets for any judgment, given the Defendants’ years of violative conduct, disregard of the laws of the United States.”

In its lawsuit filed earlier this week, the SEC has accused Binance and Zhao on thirteen separate counts of defrauding investors, operating as an unregistered broker-dealer and clearing house, as well as improperly commingling funds.

Binance.US Responds Saying Funds Are SAFU

Soon after the SEC pushing for the restraint order, Binance.US made a public announcement on Twitter adding: “User assets remain safe and secure and the platform continues to be fully operational with deposits and withdrawals functioning as normal”.

Binance.US added that the request for a preliminary injunction is unnecessary and seems to be more about the SEC Staff gaining an advantage in the legal process rather than genuinely caring about the safety of customer assets.

The exchange said that until recently, the SEC Staff did not express any concerns about the safety of customer assets, despite years of engagement. However, the company’s legal team has been in constant communication with the SEC Staff in the past week, addressing their concerns about customer asset safety.

Binance said that despite providing information to assure the SEC Staff about the safety of customer assets, they still decided to file a motion for a temporary restraining order and preliminary injunction. “We are disappointed by this action but are ready to defend ourselves in court,” added Binance.

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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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