Crypto exchange Binance US has urged a federal judge to reject a request by the U.S. securities regulator to freeze its assets. The company won’t be able to maintain the trading platform or pay employees and vendors, defense attorneys said in a court filing.
‘No Need for the Draconian Relief Sought by the SEC,’ Binance US Lawyers Say
Binance US, the American subsidiary of the largest cryptocurrency exchange, Binance, has asked a federal judge to reject a request filed by the U.S. Securities and Exchange Commission (SEC) to freeze billions of dollars’ worth of assets under its management.
Last week, the SEC sought court approval to freeze crypto assets on the platform for the duration of a legal fight against Binance.US, Binance Holdings Ltd. and Binance founder and CEO Changpeng Zhao, citing concerns over the safety of customer funds.
“Operations would quickly grind to a halt,” attorneys representing Binance US said in a court filing on Monday, quoted by Bloomberg. The lawyers warned that the exchange will not be able to pay employees and suppliers while emphasizing:
With a freeze of all corporate assets, banking partners would most likely cease to honor requests to transfer funds for any purpose, including customer redemptions.
When the SEC sued Binance, it accused the exchange of “blatant disregard of US securities laws” and “years of violative conduct.” Mishandling of customer funds and misleading investors and regulators were listed among the alleged violations. The defense team insisted, however, that customer assets are safe and stated:
There is no need for the draconian relief sought by the SEC.
One of the banking partners of Binance US has already informed the crypto platform it will no longer hold its assets starting on June 14, the filing further reveals. This partner also froze all activity on the company’s account until after the court rules on the SEC’s motion, the report notes.
On Thursday, Binance US informed customers that it’s suspending dollar deposits and withdrawals. The exchange asked users to withdraw their holdings in U.S. currency by June 13 as it transitions into a crypto-only trading platform.
