Amy Berman Jackson, a United States District Judge has directed the SEC and Binance.US to negotiate and work towards an agreement to avoid total asset freeze. In a move to avoid chaos in the U.S. crypto market and within Binance.US, U.S. District Judge Berman Jackson has ordered that the Securities and Exchange Commission works with the embattled crypto firm to arrive at a compromise.
According to a Bloomberg report on June 14, the Judge directed the two entities to a magistrate judge in a bid to work towards an agreement that will prevent a shutdown of the crypto exchange and also protect customer funds.
This outcome follows the SEC’s temporary restraining order motion filed against Binance.US, alleging that its CEO has access to customer funds.
Judge Jackson said in a hearing on June 13 that a total shutdown of the crypto exchange platform will cause more harm than good, creating “significant consequences” for both the company and the general crypto market.
“Shutting it down completely would create significant consequences not only for the company but for the digital asset markets in general,” she said.
As the SEC and Binance.US negotiate a settlement, Judge Jackson’s involvement provides optimism for a resolution that protects consumer assets while enabling the exchange to continue operations.
Related Reading: BinanceUS Adds Ex-SEC Director to its Legal Team to Fight Lawsuit
The two entities are to come up with an update on the negotiations with the magistrate court at the end of business hours on June 15. Meanwhile, before Judge Jackson’s decision, former SEC enforcement attorney John Read Stark took to his Twitter account to inform the community that “there is obviously a lot of conflict between what each party argues,” stating that we may learn of a temporary outcome by close of business today.
SEC/Binance Newsflash: Dueling Consent Orders (Read Them Now)
The SEC and the Binance defendants have each submitted draft orders of what each party wants the Judge to order in the SEC/Binance Emergency Asset Freeze Enforcement Action.
There is obviously a lot of conflict… pic.twitter.com/UWjXSgL5lR
— John Reed Stark (@JohnReedStark) June 13, 2023
SEC’s motion for a temporary restraining order
The legal conflict between the two parties started on June 6 after the SEC filed a motion for a temporary restraining order on Binance.US accusing Changpeng Zhao, its CEO of accessing customer funds.
According to the Commission, CZ had allegedly transferred $12 billion of Binance funds through a disguised entity he controlled under the name Merit Peak. Consequently, in a joint memorandum submitted on June 12, Binance.US and Changpeng ‘CZ’ Zhao totally denied the allegations. They further condemned the Commission stating that it was unable to present any evidence of the accusation. Binance.US’s case against the asset freeze is based on these rejections.