SEC Files Emergency Motion To Freeze Binance’s U.S Subsidiary

Key Points:

• The SEC filed an emergency motion to freeze assets of Binance’s US subsidiary and repatriate cash and cryptocurrency assets held on the Binance platform.
• Binance has responded, stating that the platform remains fully operational and that user assets are safe and secure.

The SEC asked a Washington, D.C. federal judge to freeze the assets of Binance’s U.S. subsidiary. The emergency order was filed late Tuesday night. It would also force the repatriation of “fiat currency and crypto assets deposited, held, traded, and/or accrued by customers on the Binance U.S crypto asset trading platform.”

The SEC alleges that two foreign entities, Sigma Chain and Merit Peak, served as conduits for billions of dollars of customer money improperly commingled with Binance’s funds. This has led to concerns about the safety and security of the platform’s users and the future of Binance’s US operations. The regulator argues that the emergency order is necessary to prevent the dissipation of available assets for any judgment, given the Defendants’ years of violative conduct and disregard for US laws.

On Monday, the SEC filed a lawsuit against Binance and its founder, Changpeng Zhao, alleging that the exchange and Zhao had defrauded investors, improperly commingled funds, and operated as an unregistered broker, dealer, and clearing house. The lawsuit and the emergency motion have raised concerns about regulatory scrutiny in the cryptocurrency world.

The order would also compel Zhao to show cause why a preliminary injunction against him and his two holding companies should not be entered. The restraining order would prevent all three entities from destroying evidence.

Binance has responded to the motion, stating that the platform remains fully operational and that user assets are safe and secure. However, the allegations and the emergency motion have caused unease among investors and raised concerns about the future of Binance’s operations in the US.

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