Wednesday, February 28, 2024
Blockchain

SEC Seeks to Freeze Binance.US Assets in Bid to Protect Customers

The Securities and Exchange Commission (SEC) has lodged an emergency action application against Binance Holdings Limited, BAM Trading Services Inc., BAM Management US Holdings, Inc., and their founder, Changpeng Zhao. The action includes a request for a temporary restraining order to freeze assets and calls for the repatriation of assets to the benefit of customers on the Binance.US crypto trading platform.

This aggressive move by the SEC is part of a broader effort to safeguard the assets of Binance.US customers as it pursues pending litigation against the platform and its founder. The agency’s main goal is to ensure that customer assets remain in the United States throughout the ongoing legal proceedings.

The emergency action features several key requests. Among them, the SEC seeks a court order compelling the defendants to explain why a preliminary injunction should not be issued against them. It also demands the freezing of BAM Management’s assets and instructs the defendants to repatriate assets held for the benefit of BAM Trading’s or BAM Management’s customers.

In addition, the SEC is seeking further measures related to the control and custody of BAM customer assets. These include a prohibition on the destruction of records by the defendants, mandatory sworn accountings of certain assets, authorization for expedited discovery from the defendants, and approval for alternative means of service.

This comes after the SEC filed 13 charges against the Binance entities and founder Changpeng Zhao on June 5, 2023. As legal proceedings unfold, the SEC’s actions illustrate its commitment to ensuring the protection of customer assets involved in cryptocurrency trading.

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