A development has been made towards the lawsuit against Binance and Binance US, as the SEC recently called for a freeze on the company's cryptocurrency holdings, particularly on Customer Assets. In the latest filing of the SEC, the regulators do not want Binance anywhere near the customers' money, asking for an emergency motion to prevent its transfers or any other scrutinies.
This is amidst the SEC's crackdown on Binance's alleged actions, which goes against its regulations, with the company also allegedly operating without the proper licenses in the country.
SEC Wants to Freeze Binance US' Access to Customer Assets
The SEC has filed an emergency motion for a temporary restraining order to freeze Binance US assets. This action effectively restricts Binance US and its CEO Changpeng Zhao from withdrawing or transferring funds from accounts associated with the company.
According to The Verge, the emergency motion also encompasses a provision that prevents Binance US from exercising control, custody, or possession over Customer Assets within five days. Furthermore, the SEC requests that Binance transfer customers' assets to "new wallets with new private keys, including new administrative keys," with the SEC being made aware of all the new wallets involved.
The SEC's motion comes in the wake of the lawsuit it filed against Binance, accusing the company of conducting unlicensed operations within the United States. The SEC asserts that Binance's operations evade governmental regulations, creating a potentially risky environment for investors and market participants.
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What Does This New Filing from the SEC Mean?
By seeking to freeze Binance US assets and asserting control over the transfer of customer assets, the SEC aims to protect investors and mitigate potential risks associated with unregulated activities.
The regulatory body has taken a firm stance against unlicensed operations, emphasizing the importance of compliance and adherence to financial regulations, even for an entity as massive as Binance.
Binance's Legal and Regulatory Troubles
Apart from the SEC problems Binance is facing now, it is also looking at a probe from the US Department of Justice for its alleged violation of the Russian sanctions, allowing transactions from the transcontinental country.
Not only that, but it also faced a probe from the CFTC for its alleged promotion of VPN use that enables Binance's service in the US, particularly for high-value transactions and account holders, to avoid detection.
It is important to note that the temporary restraining order and freezing of assets are interim measures taken by the SEC while the lawsuit progresses. The case outcome will determine the future course of action and the potential long-term impact on Binance US and the broader cryptocurrency industry.
The filing of the emergency motion by the SEC marks a significant escalation in its efforts to regulate the operations of Binance US.
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