Binance Reaches Settlement With SEC
Binance reaches settlement with SEC. Binance.US assets will not be frozen. Nevertheless, the damage to the marketplace is already enormous. The company believes that this did not happen by accident. The lawsuit of the US authority has not yet been dismissed.
The company reaches settlement with SEC
The crypto exchange reaches an agreement with the US Securities and Exchange Commission. The background to this is a lawsuit filed by the SEC in early June. In it, the authority formulates 13 allegations against Binance, the US subsidiary Binance.US and against management personnel of the group.
In addition to the usual allegations that unregistered securities were illegally sold on the Binance.US trading platform, the SEC also speaks of much more drastic offenses. Binance has cheated countless customers by moving customer deposits back and forth between different companies.
The money diverted in this way was then misused as liquidity in the interests of the group in order to generate further profits through market makers – at least that’s what the SEC claims. Binance and CEO Changpeng Zhao deny the allegations.
To prevent further breaches of trust, the SEC requested an injunction freezing all Binance.US funds. However, the responsible judge Amy Berman Jackson does not want to take any action. She asked both parties to the dispute to find a consensus.
In fact, this has succeeded, as Binance.US itself reports on Twitter. The company considers the settlement a victory as the SEC’s application was denied. The agreement states that henceforth only Binance.US employees may have access to customer deposits or other assets of the company.
Employees of the international trading platform Binance.com are no longer authorized to do this. Founder Changpeng Zhao is also excluded. He is said to have carried out the embezzlement of the equivalent of twelve billion US dollars himself. Funds sent from Binance.US to market makers Merik Peak and Sigma Chain must be repatriated to the US.
The two companies are suspected of having stocked up on customer deposits from the trading platform and having acted as market makers on the same platform. Both companies are under the control of Changpeng Zhao.
SEC lawsuit against Binance averted?
The agreement between the two parties only lasts until a court issues a final verdict. The SEC’s lawsuit against Binance is therefore far from averted. So far, however, the crypto exchange has been combative. The company apparently feels wrongly persecuted.
“We are pleased to report that the court denied the SEC’s motion for an injunction and asset freeze on our platform, which was clearly improper both factually and legally.” So Binance.US in a tweet.
The agreement with the SEC made it possible to ensure that business operations did not come to a complete standstill. In fact, the crypto exchange’s monthly trading volume is down to a tenth of what it was before the lawsuit was filed.
In April, the company trading volume was $17 billion. Among crypto exchanges that support the US dollar, that’s a 16 percent share. With the current trading volume of 1.69 billion US dollars per month, the market share is only 4.35 percent.
The company believes the SEC’s strategy is clear. It is about the destruction of the crypto exchange and, in the broadest sense, the destruction of the crypto industry – an accusation that comes from the industry more and more often.
The SEC filing would have effectively shut down our business, consistent with the agency’s ongoing attempts to crush the crypto industry by any means, including through claims unsupported by facts.
So the allegation of infidelity was out of thin air. According to Binance, there is no evidence of this.
The SEC has never presented any evidence of misappropriation of client funds. In fact, earlier this week in court, when asked by the judge, the SEC’s attorneys conceded that they have no evidence that anything of the sort happened.