The War Continues: Binance.US Counters Motion to Freeze Funds, Adds Former SEC Enforcement Official to Legal Team Amid Lawsuit

Binance.US has submitted a court request to oppose the proposed temporary restraining order by the securities regulator, arguing that such action would essentially terminate its operations.

In a filing dated June 12, Binance.US strongly criticized the Securities and Exchange Commission (SEC) for seeking an emergency motion to impose a temporary restraining order, deeming it excessively severe and burdensome.

The hearing for the temporary restraining order is scheduled for today, June 13 at the U.S. District Court for the District of Columbia, according to Cointelegraph.

Binance.US contended that implementing the restraining order would compel the shutdown of BAM Trading Services Inc., the entity responsible for providing cryptocurrency trading and exchange services for Binance.US.

The company stated:

“The requested relief would primarily harm BAM’s customers, effectively put BAM out of business, and prevent BAM from defending itself in this litigation.”

Significantly, Binance.US not only criticized the regulator’s pursuit of legal action against them, but also challenged the entire approach taken by the SEC.

They asserted that the SEC’s claims are flawed since the regulator has not yet identified any specific security being traded on BAM’s platform.

Binance.US also expressed its stance by stating, “Should the Court consider the substance of the SEC’s motion, it ought to reject it.”

Binance.US Enlists Former SEC Enforcement Co-Director George Canellos

According to a June 12 report from Bloomberg, Binance.US has hired former SEC enforcement co-director George Canellos, currently with the international law firm Milbank LLP, along with three other lawyers.

Canellos left the SEC in 2014 after serving for more than four years in different leadership positions.

“Binance is clearly preparing for a criminal prosecution and continuing to hire the best defense attorneys in the world,” said former SEC internet enforcement chief John Reed Stark on Twitter.

“Given the gravity of the fraud alleged by the CFTC and SEC (which might also be the tip of the iceberg of any criminal indictment), a DOJ prosecutor would certainly seek prison time for anyone convicted or pleading guilty to Binance-related crimes.”

As a reminder, on June 5, the SEC initiated a significant legal action against Binance and its affiliated entities. The SEC accused the cryptocurrency exchange of operating as an unregistered securities exchange and permitting U.S. customers to trade cryptocurrencies that the SEC considers as securities.

Furthermore, the regulator alleged that Binance CEO Changpeng Zhao (CZ) had access to Binance.US customer funds and claimed that he transferred $12 billion of Binance’s funds through a privately-controlled entity called Merit Peak.

The following day, on June 6, the SEC filed an urgent motion for a temporary restraining order against Binance. The motion sought to freeze assets held on Binance.US until the crypto exchange could demonstrate that CZ or any other Binance executive could not move the funds.

Although Binance and Binance.US have consistently refuted the SEC’s claims on social media throughout the week, an accompanying joint memorandum filed alongside the motion marked their first official response to the accusations.

The memorandum argued that the SEC failed to provide any evidence of mishandling or misuse of customer assets by BAM, the entity responsible for Binance’s customers.

“The SEC has manufactured an ’emergency’ solely for its own purposes, as it cannot identify a single instance in which BAM customer assets were mishandled or misused,” the memorandum stated.

Moreover, the SEC has faced backlash from U.S. lawmakers and industry leaders who have raised concerns about the regulator’s aggressive tactics in crypto enforcement.

On June 12, Representative Warren Davidson put forth a bill with the aim of restructuring the commission and called for the removal of SEC Chair Gary Gensler from his position.

This move comes as a response to the perceived heavy-handed approach taken by the SEC in its oversight of the cryptocurrency industry.

In the face of the ongoing challenges and legal battles, it is evident that Binance.US is determined not to back down. With the addition of experienced legal professionals to their team, they are positioning themselves to vigorously defend against the allegations brought forth by the SEC.

If proven not guilty, Binance.US could potentially set an example for the entire industry, demonstrating the importance of fighting for the crypto community regardless of the circumstances. As the legal proceedings unfold, the outcome of this case may have far-reaching implications for the crypto industry as a whole.