A federal judge has set a June 15 deadline for the SEC and Binance.US to resolve pending matters in a bid to avoid damaging cryptocurrency markets.
June. 15 deadline for Binance.US
Binance.US and the Securities & Exchange Commission (SEC) are racing against a 24-hour deadline in order to strike a deal that would prevent a full asset freeze for the cryptocurrency exchange.
The SEC initiated a legal complaint against Binance and its affiliated entities in the first week of June. Following that, the Commission requested a restraining order and a suspension of Binance.US’ assets.
On Tuesday, US District Judge Amy German Jackson urged the SEC to reach an agreement with Binance.US. This might clear the way for Binance to continue operating in the United States.
According to an order filed on Tuesday, Jackson gave the parties until June 15, 5 p.m. ET to resolve their differences and appointed magistrate judge Zia Faruqui to assist with negotiations.
Binance must also provide a list of expenses by June 14 at 9 a.m. ET. In preparation for the court session, the US stopped US dollar deposits last week and informed users that withdrawals could be suspended as early as Tuesday.
The SEC also suggested a fresh deal on Tuesday which would relax certain limitations that previously demanded a total freeze of assets.
The proposal provides a number of guarantees to Binance affiliate BAM Trading (in charge of Binance.US), allowing the firm to keep control over US assets for paying salaries and fulfilling other obligations.
BAM Trading would be able complete redemptions without restrictions. The order states:
“BAM Trading and BAM Management may continue to make payments for the purchase of goods and services, salaries for BAM Trading and BAM Management personnel, including pre-existing benefits, professional fees, and other similar ordinary-course expenditures for the operation of their businesses.”
SEC demands user crypto be sent back to Binance.US
The proposed arrangement specifies that Binance CEO Changpeng Zhao would be prohibited from accessing the assets or wallets of the US exchange.
Additionally, the SEC requested that Binance repatriate customer assets to the US, where external entities not associated with CZ would have authority to manage funds and facilitate customer redemptions.
In its legal action, the SEC alleged, in 13 separate charges, that Sigma Chain and Merit Peak, two non-US entities under Zhao’s control, were utilised to commingle billions of dollars in customer funds with Binance’s own resources.
These companies are believed to have operated as Binance market makers or intermediaries responsible for providing liquidity to the exchange.
Crypto news firm Blockworks has reached out to Binance for an update.
Binance had indicated that if assets were frozen, its US operations would halt and transfer of funds would be stopped, including redemptions.
As reported by Bloomberg, the judge said in a hearing that a complete shutdown of the exchange would have significant consequences not just for the exchange, but the wider crypto market as well.
The SEC’s proposal is pending approval, and more updates are expected on Thursday.
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