A U.S. judge has rejected an attempt by Binance.US, the American subsidiary of crypto exchange Binance, to sue the U.S. Securities and Exchanges Commission (SEC) over its press release that equivocates defendants’ customers.
It is unnecessary or inappropriate for the Court to “get involved in wordsmithing the parties’ press releases,” the District Court Judge stated.
D.C. District Court Judge Amy Berman Jackson, who was in charge of the case, has rejected Binance’s request to limit the SEC’s use of language regarding Binance.US’ management of customer funds.
Binance argued that such language could be detrimental to their position during the trial.
Judge Jackson stated that the court’s role does not involve “wordsmithing” public statements for either party involved in the case.
She ruled that court intervention was unnecessary and not warranted at this time and that the SEC’s public relations efforts thus far were unlikely to significantly impact the proceedings.
A Complex Web
BAM Trading, operating under the name Binance.US, filed a motion in a D.C. District Court to seek judicial intervention against the SEC.
In its motion, the company wrote that the SEC made misleading statements by claiming that BAM Trading and BAM Management dissipated, commingled, or misused customers’ funds.
Binance’s lawyers asserted that there was no evidence of any wrongdoing concerning BAM customer assets, arguing that the press release potentially harmed BAM customers rather than protecting them.
They also raised concerns about the potential influence of misleading descriptions of evidence on the jury pool.
The news comes at a time when the leading exchange, its CEO, and its American branch are under legal pressure from many countries, initially from the U.S.
The legal battle between the U.S. SEC and Binance started on June 5 after the regulators launched a lawsuit against Binance, accusing the exchange of multiple misconducts.
The most significant is the claim that Binance and Binance.US mixed customers’ funds into one account controlled by Merit Peak Limited, managed by Changpeng Zhao.
Money laundering allegations have taken center stage, with Binance.US being accused of engaging in illicit transactions facilitated by an underlying Market Maker (MM) known as Sigma Chain, which is also owned by CZ. Based on these suspicions, the SEC has filed a court application seeking to freeze the assets of Binance US.
The judge granted Binance until September 21 to respond to the SEC’s allegations, with the SEC’s reply to Binance’s pleading due by November 7.
Binance’s complaint to the court coincides with their preparations to face the SEC in the upcoming trial. In recent months, the SEC has taken legal action against several prominent cryptocurrency companies, citing the need to safeguard investors in a risky and largely non-compliant industry.
Binance Australia Debanked
In addition to this setback, Binance faced further negative developments in Australia. Binance Australia, under the management of Ben Rose, suffered an unexpected and sudden disconnection from the Australian banking system.
The branch received a notice just 12 hours before being debanked, without any prior warning or discussion.
Speaking with media, Rose said, “We received 24 hours’ notice of debanking at 11:30 pm in the evening, that was later turned into 12 hours,” leaving them with their banking services abruptly cut off. He added, “The reasons given were not entirely clear and didn’t look that great in the media.”
On May 18, Binance Australia had already announced the suspension of its USD service after Zepto, a payment service provider, and Cuscal, their banking partner, ceased their support for Binance.
During the interview, Rose estimated that approximately 1 million customers in Australia would be affected by this incident. Cuscal declined to comment on matters relating to Binance Australia but highlighted the potential risks of “scam and fraud” associated with cryptocurrencies.
The regional manager remained tight-lipped and declined to offer further details regarding the ongoing efforts to secure alternative payment providers.