Binance, Binance.US, and CZ Accuse SEC of Issuing ‘Misleading’ Statements Regarding Exchange Assets

Legal representatives representing Binance.US, Binance Holdings Limited, and Changpeng Zhao (CZ), the CEO of Binance, have filed a motion alleging that the U.S. Securities and Exchange Commission (SEC) made misleading statements in relation to an ongoing securities lawsuit. The motion, filed on June 21 in the U.S. District Court for the District of Columbia, requested that the SEC comply with applicable rules of conduct.

The motion specifically referred to a press release issued by the SEC on June 17, in which SEC Enforcement Director Gurbir Grewal suggested that CZ and Binance could commingle or divert customer assets as they pleased. The filing argued that the SEC had no evidence to support these claims and that the press release was designed to introduce confusion into the market, potentially harming customers and providing misleading descriptions of the evidence.

If approved by a federal judge, the motion could restrict the SEC from making certain public statements about the Binance lawsuit that may materially impact the court proceedings. The legal team representing Binance provided part of a transcript from a June 13 hearing, during which the SEC acknowledged that there was no evidence of Binance.US assets going offshore.

The court filing is part of an ongoing lawsuit brought by the SEC against Binance, Binance.US, and CZ, which was filed on June 5. The lawsuit alleges unregistered securities offerings and Binance’s failure to register as an exchange or broker-dealer clearing agency. SEC Chair Gary Gensler previously stated that CZ and Binance had misled investors about their risk controls, and the SEC is seeking disgorgement and other penalties.

During the legal proceedings in the United States, Binance announced the launch of a regulated cryptocurrency platform in Kazakhstan. Meanwhile, the SEC had initially sought to freeze all Binance.US assets but reached a compromise agreement where only the exchange’s employees would have access to client funds while the litigation continues.

The outcome of this motion and the ongoing lawsuit will have significant implications for the relationship between Binance, Binance.US, CZ, and the SEC, as well as the broader regulatory landscape surrounding cryptocurrency exchanges. The case highlights the increasing regulatory scrutiny faced by the crypto industry and the importance of transparency and compliance in navigating these challenges.

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