- Following a motion filed by Binance.US to counter an accusation levelled against it by the Security Exchange Commission, a federal judge has requested the parties to find a compromise.
- U.S. District Judge Amy Berman Jackson referred the matter to a magistrate judge to enable negotiations.
- The negotiation is expected at the end of business day on June 15th.
A federal judge has declined the Security Exchange Commission’s (SEC) request to completely shut down the American arm of crypto giant Binance, arguing that the move will not suit the crypto market. The judge told the SEC to find a compromise allowing the crypto firm to maintain essential operations as it defends itself against charges that violated securities laws.
The regulator has trained its gun on the crypto firm accusing it, its global affiliate Binance, and its CEO Changpeng Zhao of misusing customers’ funds, knowingly misleading investors, and dodging basic disclosure rules. The U.S. regulator sued the crypto exchange, its CEO, BAM Trading, and BAM Management, alleging that the firm had mishandled funds and lied to regulators. BAM Trading Services Inc, doing business as Binance.US, is a cryptocurrency exchange. The company provides a platform for trading various cryptocurrencies. Binance.US serves customers in the United States.
The world’s largest crypto trading platform filed its response to SEC on Monday, arguing that the regulator’s push for a temporary restraining order would prevent it from paying employees, vendors, or anyone else. According to the New York Times, banks had signaled that they would stop working with Binance.US, forcing the firm to announce it would no longer allow customers to trade on U.S. dollars after the crackdown by the regulator.
Find a compromise!
To find a compromise solution to protect the $2.2 Billion in U.S. customer assets without shutting down the crypto exchange, U.S. District Judge Amy Berman Jackson referred Binance.US and SEC to a magistrate judge.
The Commission had filed an emergency motion for a temporary restraining order against Binance.US, accusing its CEO of accessing customers’ funds. The crypto firm, in response, filed a motion on June 12, where it strongly challenged the regulator’s emergency motion for a temporary restraining order, terming it harsh, draconian, and a death sentence to its business. The firm argued that the regulator was attempting to bring it to its knees before it could mount a solid legal defense.
Even though the regulator has accused the crypto company of operating illegally, Judge Jackson argues that shutting the exchange completely will create significant consequences for Binance and the crypto market. The negotiation is scheduled for a hearing at the end of business hours on June 15.
The judge added that the SEC’s enforcement power is inefficient and cumbersome; she wants the agency to settle with the crypto exchange.
“Not that far apart.”
In the words of Judge Amy Jackson, the parties are better off negotiating, arguing that they are “not that far apart “and that their resolution will provide a sigh of relief and safeguard investors’ confidence in the crypto market.
Her final decision on SEC’s motion for a temporary restraining order would depend on the outcome of the discussions with the magistrate. June, 15th is the date she has scheduled for an update on the negotiation.
