Game-Changer: SEC and Binance.US Negotiating to Safeguard Funds

Game-Changer: SEC and Binance.US Negotiating to Safeguard Funds
In a fascinating turn of events, Binance.US and the United States Securities and Exchange Commission (SEC) have struck a remarkable deal to collaboratively forge a path that would steer clear of freezing the exchange's entire asset pool. The parties involved have joined forces, aiming to find an innovative solution that preserves the dynamic operations of Binance.US while satisfying the regulatory requirements put forth by the SEC.

According to a recent report by Bloomberg on June 14, U.S. District Judge Amy Berman Jackson has taken a step by referring the two organizations to a magistrate judge. This referral aims to facilitate the negotiation of a compromise arrangement that would safeguard customer funds, while avoiding the necessity of shutting down the exchange.

During a hearing on June 13, U.S. District Judge Amy Berman Jackson expressed her concerns about the potential repercussions of completely shutting down the company. She emphasized that such an action would not only impact the company itself but also have significant implications for the broader digital asset markets.

Judge Jackson made it clear that she would refrain from reaching a final decision on the SEC's motion for a temporary restraining order until the two parties had resolved the matter with the assistance of the magistrate.

The negotiations with the magistrate have a scheduled update at the close of business on June 15. Furthermore, Judge Jackson observed that the SEC and Binance.US appeared to be relatively close in reaching an agreement regarding the matter.

Prior to Judge Jackson's decision during the hearing, former SEC enforcement attorney John Read Stark shared with his 20,000 Twitter followers that there was a notable divergence in the desired outcomes between the involved parties during the proceedings.

Stark clarified that despite the differing objectives of the parties involved, it is still within the judge's authority to mandate a compromise and seek a mutually agreeable resolution.

On June 6, the SEC took urgent action by filing an emergency motion for a temporary restraining order against Binance.US. The allegations made were centered around Binance CEO Changpeng "CZ" Zhao, suggesting that he had the ability to access customer funds held by Binance.US.

According to the SEC, it was claimed that Zhao had transferred $12 billion of Binance's funds through a controlled entity known as Merit Peak.

Both Binance.US and Zhao vehemently denied these allegations in a joint memorandum submitted prior to the restraining order hearing on June 12. They emphasized that the SEC had failed to provide any evidence of customer funds being mishandled, stating that the regulator was unable to pinpoint a single instance of such misuse occurring within Binance.US.

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