Binance.US Now Filed A Motion To Reject Misleading SEC Allegations

Key Points:

• Binance.US said in a document filed on June 21 that the SEC has no proof that the crypto exchange commingled users’ assets.
• According to the complaint, the SEC has no proof that the exchange commingled clients’ money or shifted the assets at will.
• The exchange also accuses Gary Gensler, the chairman, of a conflict of interest.

Lawyers for Binance.US, Binance Holdings Limited, and Binance CEO Changpeng Zhao have filed a petition claiming that the US Securities and Exchange Commission (SEC) deceived the public in comments given in connection with an ongoing securities action.

Binance.US said in a document filed on June 21 that the SEC has no proof that the crypto exchange commingled users’ assets. Binance, Binance.US, and CZ’s legal teams claimed the SEC made “misleading” comments in a June 17 news release and filed a request for the financial regulator to follow relevant norms of conduct.

“The SEC has no evidence that BAM customer assets have been dissipated, commingled or misused in any way. The SEC’s press release also appears to be designed to introduce unwarranted confusion into the marketplace, which could have the effect of harming BAM customers rather than protecting them. It also risks tainting the jury pool with misleading descriptions of the evidence concerning the Defendants,” according to the June 21 filing.

Binance has made substantial inroads into numerous worldwide markets, including the United States, in recent years. Nevertheless, with the collapse of FTX and Alameda Research late last year, which impacted many institutional investors and retail traders, Binance’s market share has been in danger of regulatory scrutiny and competition from rival exchanges.

The exchange is suing the Securities and Exchange Commission (SEC) in the United States for allegedly listing unregistered securities and offers. But, Binance and its legal staff have categorically refuted the SEC’s charges.

The petition also pointed to SEC Enforcement Director Gurbir Grewal’s argument that CZ and Binance might commingle or redirect client money as they saw fit, as well as an order compelling all parties engaged in the litigation to return to the United States.

“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,” Grewal noted.

The exchange also accuses the company’s chairman, Gary Gensler, of having a conflict of interest. They claimed that before being appointed as SEC head, Gensler requested a position as an informal consultant to the exchange.

“The SEC’s press release also appears to be designed to introduce unwarranted confusion into the marketplace, which could have the effect of harming BAM customers rather than protecting them. It also risks tainting the jury pool with misleading descriptions of the evidence concerning the Defendants,” the exchange said.

If the court grants Binance’s application, the SEC may be barred from making certain public remarks in order to avoid market confusion and safeguard the exchange’s image.

Not only Binance but the Third Circuit also ruled that it would retain Coinbase’s challenge to the inaction of the SEC. Coinbase has previously suggested that the SEC should be forced to reply to its petition by the court.

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Harold

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