Binance.US Denies SEC Allegations: No Flow Of Funds Abroad

Binance US crypto exchange denies SEC allegations. (Photo; Doc. Criptomoedas)

JAKARTA - Binance's subsidiary in the United States, Binance.US, filed a motion against the claim of the Securities and Exchange Commission (SEC) stating that the company mismanages user assets in a "misleading" manner. The exchange refers to a contradictory statement issued by regulators, which suggests that customer assets have never actually been transferred outside the United States.

In a screenshot of the submission shared by Binance CEO Changpeng Zhao (CZ), Binance.US showed a conversation between the SEC and the court. In the conversation, the SEC pressured the agency to get a clear answer as to whether Binance.US' assets were actually transferred overseas.

"With this, assets do not go abroad," replied the SEC. "We don't see any flow of money out of the US."

The conversation was linked to the SEC's request to freeze Binance.US assets earlier this month, fearing the asset would spread internationally. However, the request was rejected by the judge who led the case. The judge ordered both sides to negotiate a deal that would allow the platform to continue operating while ensuring assets remain within the country.

In a lawsuit filed by the SEC on June 5, the agency claimed that Binance and Binance.US "coupled" billions of dollars in user assets into Merit Peak Limited, an entity owned and controlled by CZ. According to the SEC, the assets of the two companies should be kept separately.

Binance wrote in his filing that the SEC's statement about the company "coupling customer assets or transferring customer assets at will" directly contradicts the SEC's statement to the court stating that the agency has no evidence that it ever happened.

Binance.US also expressed concern that SEC claims could potentially create unnecessary confusion in the market and could harm customers. In addition, SEC claims are also at risk of "contaminating a jury group" by providing inaccurate information about existing evidence of the exchange.

If the submission submitted by Binance is approved, it could prevent the SEC from making certain public statements that could affect the market, as Binance has accused.

The crypto market experienced a decline earlier this month after the SEC announced a lawsuit against Binance and Coinbase. Some of the most affected coins are coins specifically cited in lawsuits as illegally traded securities, including BNB, Cardano (ADA), and Solana (SOL).

Although Binance.US is allowed to continue business operations, the company has terminated employment and is expected to have an impact on about 50 employees. Some of the platform's banking partners have also ended cooperation with Binance.US.