Binance Blasts SEC for Misleading Claims About Consent Order Agreement

As the lawsuit between the United States Securities and Exchange Commission (SEC) and Binance persists, the top crypto exchange has slammed the Securities Commission for inscribing misleading claims in one of its court filings.

Recall that the SEC filed a 13-charge lawsuit against the biggest crypto exchange in the world in early June and subsequently filed a motion to freeze assets belonging to Binance.US, the United States branch of Binance. 

However, both parties later came to a common ground, agreeing that Binance.US would be allowed to access funds for its continued operations in the U.S. until the pending litigation is concluded. This agreement, amongst others, was approved by Washington District Court federal judge Amy Berman Jackson on June 27, 2023.

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SEC accuses Binance and CZ of customer funds mishandling

Responding to this latest court ruling from Judge Jackson, the SEC issued a press release on the matter, stating that the Commission secured an emergency relief to protect Binance.US customers’ assets. The SEC further claimed that the Consent Order was essential to protecting investor assets because Changpeng Zhao and Binance have control of customers’ assets on the trading platform and have been commingling and diverting customer assets as they desire.

In particular, the Director of the SEC’s Division of Enforcement Gurbir S. Grewal said, “Given that Changpeng Zhao and Binance have control of the platforms’ customers’ assets and have been able to commingle customer assets or divert customer assets as they please, as we have alleged, these prohibitions are essential to protecting investor assets.”

“Further, we ensured that U.S. customers will be able to withdraw their assets from the platform while we work to resolve the alleged underlying misconduct and hold Zhao and the Binance entities accountable for their alleged securities law violations,” he added.

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Binance hits back

According to Binance, the claims from the SEC are misleading and disappointing given that the securities agency submitted before the court that it lacks evidence concerning this matter. Contrary to the SEC’s claim that it is protecting Binance.US customers, Binance stated that the SEC’s main intent is to cause unwarranted confusion in the marketplace which could adversely affect its customers. 

In accordance, Binance filed a motion on June 21, requesting the presiding court to issue an order directing the SEC counsel to comply with all applicable rules of conduct concerning extrajudicial statements and Rules of Professional Conduct, which postulate that counsel cannot make misleading extrajudicial statements that may materially impact court proceedings.

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