Judge Rejects Binance’s Motion Over Allegedly ‘Misleading’ SEC Statements

A federal judge presiding over the lawsuit between Binance.US, Binance Holdings Limited, and CEO Changpeng “CZ” Zhao and the United States Securities and Exchange Commission (SEC) has rejected a motion that sought to prevent the financial regulator from making public statements regarding the case.

In a ruling issued on June 26 by Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia, she determined that court intervention was unnecessary in relation to the motion filed by parties associated with Binance and Binance.US. The motion, filed on June 21, accused the SEC of issuing misleading statements that could potentially prejudice the jury and create confusion in the market.

Judge Jackson stated that while all lawyers involved in the case must adhere to ethical obligations, it was not clear that court intervention was needed at that time or that it was appropriate for the court to engage in the wording of the parties’ press releases. She further expressed that the SEC’s public relations efforts thus far were unlikely to significantly impact the proceedings.

The complaint arose from a press release issued by the SEC on June 17, in which Enforcement Director Gurbir Grewal alleged that CZ and Binance had the ability to commingle and divert customer assets as they pleased. The legal teams of Binance and Binance.US claimed that the SEC’s statements were misleading and largely denied the allegations.

Binance, Binance.US, and CZ are all defendants in a lawsuit filed by the SEC on June 5, which alleges that the exchanges offered unregistered securities to U.S. customers and that Binance failed to register as an exchange or a broker-dealer clearing agency. Initially, the SEC sought to freeze all assets of Binance.US through a motion but later reached a compromise agreement whereby only the exchange’s employees would have access to client funds.

Despite the ongoing legal proceedings in the U.S., Binance has continued its global operations. It recently announced the launch of a regulated cryptocurrency platform in Kazakhstan on June 20. However, on June 23, the Belgian Financial Services and Markets Authority ordered Binance to cease offering cryptocurrency exchange and custody wallet services. Additionally, reports indicate that Binance has withdrawn its application with Austria’s financial regulatory authority.

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