SEC and Binance seek compromise on freeze of US Assets

Binance.US, the United States arm of the cryptocurrency exchange Binance, may need to transfer all its assets based in the U.S. to new wallets. However, under a proposed consent order, the company would be allowed to fulfill its financial obligations. The U.S. Securities and Exchange Commission (SEC) and BAM Trading, the operator of Binance.US, have jointly submitted a request for this consent order, which aims to relax some of the restrictions imposed by a previous SEC request to freeze the company’s assets.

The new consent order, if approved, would provide additional assurances to the SEC while enabling BAM Trading to make necessary payments, including salaries, purchases of goods and services, professional fees, and other routine business expenses. However, a crucial condition for the assets to be unfrozen is that Binance cannot make any payments or transfers benefiting the company itself or any individual or entity associated with Binance. Moreover, the order explicitly bars Binance CEO Changpeng Zhao from accessing any assets held by BAM Trading or Binance.US.

Following the SEC’s lawsuit against Binance and Zhao, the commission urgently sought to freeze BAM Trading’s assets. In response, BAM Trading filed an opposition arguing that the SEC’s rationale for the freeze did not meet the court’s burden of proof.

As of now, the court has not yet approved the proposed consent order. There seems to be a disagreement between the SEC and Binance regarding certain details, prompting the court to request further clarification.

Judge Amy Berman Jackson, as reported on the Public Access to Court Electronic Records website, has asked both parties to submit their opinions and any modifications to the proposed consent order by 1:00 pm Eastern Time on June 13. The court will consider these submissions before making a decision on the consent order.