SEC vs Binance update: Judge attempts to broker a compromise

Binance, the largest cryptocurrency exchange by volume, argues that the Securities & Exchange Commission’s (SEC) temporary restraining order would effectively end the exchange’s business in the US. 

In an unexpected move, the Judge set to preside over the hearing on Tuesday ordered the two entities to compromise and present a negotiated temporary freeze plan. 

Also read: Two key dates over the SEC request to freeze Binance assets

Binance and SEC submit an expedited discovery plan ahead of June 13 hearing

The US financial regulator is keen on freezing Binance US funds, while the exchange argues that the SEC’s move is “draconian” and will effectively end BAM Trading Services’ operations. Binance urged the court to deny the SEC’s motion to freeze the exchange’s funds. 

In an unprecedented move, the judge asked both entities to come to an agreement on a negotiated temporary freeze or an expedited discovery plan and present their understanding by 1 PM EDT. The two parties worked on the tight deadline and are still awaiting a hearing, likely to occur at 2 PM EDT. 

What does the SEC seek?

The SEC seeks extraordinary relief against Binance, an asset freeze that repatriates billions of dollars. The US financial regulator believes that the evidence of fraud is overwhelming. SEC believes that Binance’s customer funds are at a risk and freezing the exchange’s funds would assuage these concerns.

The case therefore remains on a fast track and it is atypical of the SEC to seek an emergency relief against such a large entity as Binance.

John Reed Stark, former chief of the Office of Internet Enforcement of the SEC believes that the June 13 hearing is the most important SEC crypto-related enforcement action in history.