In a recent development, Binance.US and the United States Securities and Exchange Commission (SEC) have initiated a cooperative effort to resolve their differences and avoid the exchange’s asset freeze. The move comes after US District Judge Amy Berman Jackson referred the two parties to a magistrate judge to explore a compromise arrangement to protect customer funds without requiring closure.
On June 14, Bloomberg revealed that Judge Amy Berman Jackson, during a hearing on June 13, emphasized the potential ramifications of a complete shutdown of Binance.US. He was aware of the impact this would have on the company and the wider digital asset market, so he called for a compromise. As a result, the judge referred the case to the magistrates for further negotiation.
Judge Jackson clarified that he would refrain from making a final decision on the SEC’s motion for a temporary restraining order until both parties can resolve the situation with a judge. A progress update on ongoing negotiations is scheduled for the end of business hours on June 15.
Additionally, the judge expressed optimism about a possible deal between the SEC and Binance.US, indicating that their positions are relatively close. This shows that it is possible to find common ground and reach a compromise.
During the trial, former SEC enforcement attorney John Read Stark, in a tweet to his 20,000 followers, acknowledged the conflicting goals of the parties involved. However, he stressed that despite the differences, judges can still order a compromise that satisfactorily resolves the dispute.
The SEC’s emergency motion for a temporary restraining order, filed on June 6, alleges Binance CEO Changpeng “CZ” Zhao had unauthorized access to Binance.US customer funds. The regulatory agency further alleged that Zhao had transferred $12 billion through an entity under its control called Merit Peak.
Both Binance.US and Zhao vehemently denied these allegations in a joint memorandum filed before the hearing. They challenged the SEC’s inability to provide evidence of mishandling of customer funds and argued that the emergency was simply created by the SEC for its purposes.
The negotiations between Binance.US and the SEC, facilitated by the judges, signify a concerted effort to protect customer funds while avoiding the drastic measures of freezing the exchange’s assets. The results of this discussion will be revealed in time.