Jun 6, 2023 - Economy

SEC asks court to freeze Binance's U.S. assets

Illustration of the SEC seal's shadow looming over a pixelated coin.

Illustration: Maura Losch/Axios

The U.S. Securities and Exchange Commission (SEC) on Tuesday asked a federal court for a temporary restraining order that would freeze the assets of crypto exchange Binance's U.S. affiliate.

Why it matters: The motion comes a day after the securities regulator sued the company for illegally operating an exchange, among other charges.

What they're saying: "The SEC respectfully submits that this relief is necessary on an expedited basis to ensure the safety of customer assets and prevent the dissipation of available assets for any judgment," the commission wrote in its filing.

  • The intent to seek the asset freeze was noted in the regulator's complaint Monday.

The other side: "The filing of the preliminary injunction is unwarranted and based more on the SEC Staff obtaining an advantage in litigation versus genuine concern about the safety of customer assets. Until recently – despite years of engagement – the SEC Staff has not expressed a concern about the safety of customer assets," Binance.US said in a statement.

Details: The order stems from the SEC's allegations that, unlike the company's representations to the public and government, Binance had a close relationship to its U.S. affiliate and CEO Changpeng Zhao oversaw the business's operations.

  • The SEC also accused the parent company of accessing U.S. customers' funds.
  • A related filing asks that Binance's U.S. affiliate bring back and secure all customer assets in accounts not accessible to other parties.

Editor's note: The story has been updated with a statement from Binance.US.

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