Binance’s US Arm Faces Existential Threat as SEC Lawsuit Looms

The new lawsuit brought by the U.S. Securities and Exchange Commission (SEC) may have disastrous effects for Binance US, the largest cryptocurrency exchange in the world by trading volume, according to Binance. Binance cautions that if the SEC is successful in freezing its assets, it will completely cripple the business and prevent it from being able to finance any of its operations.

Binance responds to the SEC’s motion by asserting that the relief the SEC is requesting is pointless and unwarranted. The suggested remedies, which include a complete halt to all business operations, would be extremely detrimental to Binance US’s clients, possibly resulting in the company’s death and preventing it from presenting a defense in the lawsuit.

“If the Court does address the merits of the SEC’s motion, it should deny that motion. The SEC seeks unnecessary and unjustified relief. Far from requesting relief that is “carefully calibrated” to “maintain the status quo,” the SEC’s proposed remedies would effectively end BAM’s business.

The SEC seeks, among many other things, a draconian and unduly burdensome freeze of all the company’s operations without any exceptions. The requested relief would primarily harm BAM’s customers, effectively put BAM out of business, and prevent BAM from defending itself in this litigation.

Without the ability to pay its employees, vendors, suppliers, and professionals in the ordinary course of business and to maintain its technology platform, operations would quickly grind to a halt and BAM would be unable to even fund its defense to this action. With a freeze of all corporate assets, banking partners would most likely cease to honor requests to transfer funds for any purpose, including customer redemptions.”

Binance.US Assures Customer Asset Security and Questions the Need for Asset Freeze

The business underlines that Binance US would swiftly come to a standstill if it were unable to pay its staff, suppliers, and specialists, as well as keep up its technological infrastructure. Additionally, a freeze on assets would probably cause banking partners to refuse to transmit money for any reason, including client redemptions.

Customers are assured by Binance.US that their assets are safe, appropriately separated, and always available. This claim is included in the exchange’s defense against the need to freeze its assets.

Additionally, Binance’s legal team disputes the SEC’s allegations, pointing out that no examples of Binance US misusing or mishandling customer money are mentioned in the case. The business disputes the SEC’s designation of the circumstance as a “emergency.”

The exchange is adamant about defending its commercial interests and defending the rights of its consumers as the legal dispute between Binance US and the SEC develops. The decision of this lawsuit will significantly impact both the regulatory environment controlling digital assets and the bitcoin market.