Lawyers representing United States-based crypto exchange Binance.US, global exchange Binance Holdings Limited, and Binance CEO Changpeng “CZ” Zhao, have filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) over an ongoing securities lawsuit. submitted a petition claiming that he misled the public in statements. Here are the details…
Binance exchange sues SEC
The legal teams of Binance, Binance.US, and CZ allege that the SEC made “misleading” statements in its June 17 press release in their June 21 filing with the U.S. District Court for the District of Columbia. He filed a petition for the financial regulator to comply with the “applicable code of conduct.” The petition referred to SEC Executive Director Gurbir Grewal’s assertion that CZ and Binance “could mix customer assets or divert customer assets as they wish” and an order requiring all parties involved in the case to return to the United States. The document dated 21 June included the following statements:
The SEC has no evidence of any distribution, mixing, or misuse of BAM (Binance.US) client assets. The SEC’s press release also appears to have been designed to create unwarranted confusion in the market, which could have the effect of harming BAM customers rather than protecting them. It also risks tarnishing the jury pool with misleading descriptions of evidence regarding Defendants.
Lmao @ Binance v. SEC #FireGensler
Court: "I want to know, are BAM assets going offshore? Is it happening or is it not? It's stunning to me that I've now asked this question to each of the SEC attorneys 5 times."
SEC: "So currently the assets are not going offshore… We're not… pic.twitter.com/QkEY5HM2ji
— Tree of Alpha (@Tree_of_Alpha) June 21, 2023
If the order is upheld by a federal judge, it could prevent the SEC from making certain public statements regarding the Binance case during the litigation that could “significantly affect court proceedings.” The Binance legal team provided part of a transcript of a June 13 hearing in which the SEC attorney admitted there was no evidence that the assets on BinanceUS had “going offshore.” According to the statements, “the SEC’s press release is misleading, contains statements that the SEC knows are not supported by evidence, and is against the code of professional conduct.”
What had happened?
The court filing is part of an ongoing lawsuit filed by the SEC against Binance, BinanceUS, and CZ on June 5 for alleged unregistered securities offerings and Binance’s failure to register as an exchange or broker-exchange. SEC Chairman Gary Gensler said at the time that CZ and Binance “misled investors about their risk controls” and that the regulator sought compensation and other penalties.
The SEC has filed a request for the court to freeze all BinanceUS assets. Ultimately, however, he reached a settlement agreement where only the exchange’s employees could access client funds while the case was pending. Amid legal proceedings in the US, Binance announced the launch of a regulated crypto platform in Kazakhstan, as we reported on Kriptokoin.com.
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