The U.S. Securities and Exchange Commission’s lawsuit against Binance and Binance.US was heard by a federal court, but the judge rejected imposing a temporary restraining order freezing the assets of the American trading platform.
This move by the court would make it possible for the company’s U.S. division to carry on operating while working out constraints with the regulator.
There is “absolutely no need” for a restraining order, according to Judge Amy Berman Jackson of the D.C. District Court, if the parties can agree on established limits themselves. As the parties continued to negotiate, the judge ordered Binance.US to submit the details of the firm’s expenses to the court.
In an overcrowded Washington courtroom judge hit SEC lawyers over their request to seize all of the business’ holdings up until they could demonstrate that no one from Binance’s international platform, including Changpeng “CZ” Zhao, was granted access to its private keys.
The judge sometimes appeared irritated by the answers she was receiving when she questioned whether any funds belonging to Binance US customers had left the country. Several SEC attorneys had said that their main concern was whether Binance’s global platform had access to enough private key shards to move funds.
Initially, in the day’s proceedings, the judge indicated that she might be likely to grant some kind of restriction on Binance’s control over Binance US assets but rather than a full restraining order, ordering the companies to agree on their suggested constraints and ordering the SEC to contrast what it wanted with what the companies proposed in place of the restraining order itself.
The parties concerned have also issued a revised order that would permit BAM Trading and BAM Management, parent firms of Binance US, to maintain control over user fiat and cryptocurrency assets only to enable client transactions.
However, the latest instructions would mandate that BAM businesses move crypto funds to new set-up wallets that are entirely under the supervision of U.S. business personnel. Additionally, SEC lawyers would need to get information from BAM businesses about specific accounts, balances, clients, and other matters.
The prospect that Binance CEO Changpeng Zhao and other executives and businesses based outside of the United States may have access to U.S. client funds is one of the SEC’s main concerns, and those restrictions connect to that concern.