In a significant development regarding the ongoing legal battle between Binance.US and the United States Securities and Exchange Commission (SEC), both parties have agreed to work on an arrangement that would prevent the freezing of all assets held by the exchange.
U.S. District Judge Amy Berman Jackson referred the matter to a magistrate judge during a hearing on June 13, stating that a complete shutdown of Binance.US would have severe consequences for the company and the digital asset markets as a whole.
Judge Jackson emphasized that she would not make a final decision on the SEC’s motion for a temporary restraining order until the two organizations had the opportunity to negotiate and reach a compromise under the guidance of the magistrate judge.
A progress update on these negotiations is expected by the end of business hours on June 15, raising hopes of a potential resolution in the near future.
During the hearing, Judge Jackson indicated that the SEC and Binance.US were not significantly far apart from each other in terms of reaching an agreement.
This positive note suggests that a middle ground may be found, enabling the protection of customer funds without the need for drastic measures.
The lead-up to the hearing witnessed conflicting interests between the SEC and Binance.US, as highlighted by former SEC enforcement attorney John Read Stark in a tweet to his 20,000 followers.
However, Stark remained optimistic about the judge’s ability to order a compromise and bridge the gap between the two parties.
The SEC’s emergency motion for a temporary restraining order was filed on June 6, accusing Binance CEO Changpeng “CZ” Zhao of gaining unauthorized access to Binance.US customer funds. The regulator alleged that Zhao orchestrated the transfer of $12 billion through his controlled entity, Merit Peak.
In response, both Binance.US and Zhao firmly denied any mishandling of funds in a joint memorandum submitted prior to the hearing. They vehemently refuted the SEC’s claims, pointing out that the regulator failed to identify a single instance of misusing customer funds at Binance.US.
The outcome of these negotiations between Binance.US and the SEC will not only impact the immediate situation but will also have broader implications for the digital asset markets.
As the deadline for the progress update approaches, industry observers eagerly await the possibility of a compromise that safeguards customer funds and allows the exchange to continue its operations without disruption.