Sec Continues To Pursue Binance.us
- Posted on November 28, 2023 8:46 PM
- Cryptocurrency Exchanges News
- 202 Views
Binance.US attorney Matthew Laroche has requested a federal judge to dismiss the SEC's fraud investigation.
The U.S. Securities and Exchange Commission (SEC) continues to investigate whether Binance.US has a backdoor to control customer assets similar to FTX.
In June, the SEC filed a lawsuit against Binance and Binance.US, alleging the exchange engaged in unregistered securities sales and accused Binance and its founder, Changpeng Zhao, of fraud, conflicts of interest, intentional lack of disclosure, and willful violation of laws.
Amid the allegations, the SEC claimed that the exchange redirected customer assets at its discretion, including sending funds to Sigma Chain, a Switzerland-based entity controlled by Zhao.
During a hearing on November 27 in federal court, Binance.US lawyers argued that the SEC lacked evidence of the misuse of customer assets and requested U.S. Magistrate Judge Zia Faruqui to stop the fraud investigation.
Binance.US attorney Matthew Laroche highlighted the nearly 90% drop in Binance.US assets and the halving of the user base since the lawsuit was filed, emphasizing the escalating costs associated with the case.
The request came after Binance and Zhao admitted guilt to violating U.S. Anti-Money Laundering laws as part of a $4.3 billion deal with the U.S. Department of Justice, Treasury Department, and Commodity Futures Trading Commission. However, the hearing did not address the fraud allegations in the SEC's June lawsuit against the crypto exchange.
Judge Faruqui urged Binance.US and the SEC to resolve the dispute and report back by December 15. Questions regarding whether Zhao can leave the U.S. and return before his scheduled sentencing in February are also being considered. The judge ruled that Zhao is not allowed to travel to the United Arab Emirates until the U.S. government's review request is resolved.
Breaking News: Judge Orders That The Condition Permitting CZ To Return To The UAE Pending Sentencing Is STAYED (i.e. CZ Must Remain in the Continental U.S. For Now)
— John Reed Stark (@JohnReedStark) November 27, 2023
(See Updated Compendium Below With Links To All Relevant DOJ/Binance/CZ Court Filings)
Yesterday, I predicted… pic.twitter.com/I6MmHkINv2
If Zhao is found guilty, he could face up to 18 months in prison under federal sentencing guidelines.
