In a recent crackdown on crypto, the SEC has filed a motion to freeze crypto holdings on Binance.US. But Bitcoin turns SEC’s lemons into sweet lemonade.
According to the court filing revealed on Tuesday, the U.S. Securities and Exchange Commission (SEC) has called for temporary restraints of cryptocurrency held on Binance.US.
The emergency order submitted to the U.S. District Court for the District of Columbia targets 8 specific activities of Binance and Binance.US, along with their CEO Changpeng Zhao (CZ).
The regulatory body seeks to obtain a temporary restraining order, freezing the assets held by Binance.US and facilitating the return of funds to U.S. customers or implementing measures that benefit American users.
Additionally, the SEC has demanded that Binance US be prohibited from tampering with or destroying any relevant documents, as well as engaging in any other suspicious actions. This latest development follows the SEC’s lawsuit against Binance on June 6. Coinbase, another major crypto exchange, also faces legal actions from the regulatory agency.
Media sources point out that the SEC’s allegations against Binance and Coinbase revolve around their alleged operation as unlicensed stock exchanges, allowing the trading of coins that the SEC considers securities.
These lawsuits form part of a broader legal offensive by the U.S. government against centralized cryptocurrency exchanges (CEX) operating within the country.
In light of these events, industry observers anticipate that the SEC may pursue legal actions against additional CEX exchanges. This speculation stems from SEC Chairman Gary Gensler’s previous statement, where he indicated that, apart from Bitcoin, he views most other coins as securities.
Consequently, CEX exchanges listing coins classified as securities by the SEC may potentially face lawsuits in the future.
Tensions have escalated since the start of 2023. Coinbase has made repeated attempts to communicate with the SEC regarding licensing and regulatory matters.
However, the agency has consistently refused to provide the necessary guidance. In March, the SEC issued a warning to Coinbase’s staking service, prompting the exchange to initiate legal action against the regulatory body.
Similar to Coinbase, Binance has undergone a series of legal troubles over the past 6 months. One of the most significant is the March lawsuit of the U.S. Commodity Futures Trading Commission (CFTC) that targets Binance’s CEO Changpeng Zhao.
The CFTC accused him of committing serious violations of asset trading regulations. Simultaneously, the U.S. Department of Justice initiated an investigation into Binance on suspicions of non-compliance with anti-money laundering regulations.
Under mounting regulatory pressure, Binance.US had to withdraw its planned acquisition of Voyager Digital.
In response to the lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Coinbase, CEO Brian Armstrong has publicly voiced his position. Armstrong expressed confidence in both the factual basis and legal merits of Coinbase’s case.
Coinbase’s CEO emphasized that the ongoing trial represents a crucial opportunity to establish definitive regulatory frameworks for the cryptocurrency industry. He also argued the contradictory statements made by the SEC and the CFTC regarding the classification of various coins as securities.
Bitcoin Pumps Amid SEC-CEXs War
Bitcoin and altcoins thrive in the face of adversity. Bitcoin has made a remarkable recovery, surging to $27,000 amidst the ongoing battles between the SEC and the centralized exchanges.
Following the news of the SEC’s allegations against Binance, the flagship cryptocurrency experienced a temporary setback, dropping to $25,600. However, the crypto market has displayed signs of resilience, with altcoins also witnessing substantial gains.
Coinbase, Robinhood, and former CFTC leaders will testify before Congress today. The scheduled hearing will discuss broader regulatory landscape and potential legislative actions concerning cryptocurrencies. Notably, this event will take place without the presence of the SEC.