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SEC and Binance.US Agree to Negotiate to Avoid Complete Asset Freezing

Binance.US and the U.S. Securities and Exchange Commission (SEC) have agreed to collaborate on an arrangement that will allow the exchange to avoid freezing all of its assets.

Bloomberg reported on June 14 that U.S. District Judge Amy Berman Jackson referred the two organizations to a magistrate judge to work on a compromise arrangement to protect customer funds without the need to shut down the exchange.

– A complete shutdown would have significant consequences not only for the company but also for the digital asset markets in general – Judge Jackson said at a hearing on June 13.

Judge Jackson emphasized that she would not make a final decision on the SEC’s request for a temporary restraining order until the two sides resolve the situation with the judge.

News about the negotiations with the judge is scheduled for June 15.

Additionally, she noted that the SEC and Binance.US appear to be ‘not that far apart’ when it comes to reaching an agreement on the matter.

Before Judge Jackson made her decision at the hearing, former SEC enforcement attorney John Read Stark informed his 20,000 followers on Twitter that there is ‘a lot of conflict between what each side’ wants to get out of the hearing.

– That does not mean the judge cannot order a compromise and find common ground – Stark explained.

The SEC filed an emergency request for a temporary restraining order against Binance.US on June 6, after accusing Binance CEO Changpeng ‘CZ’ Zhao of having access to Binance.US customer funds.

The regulator claimed that Zhao transferred $12 billion of Binance’s assets through an entity he controlled called Merit Peak.

In a joint memorandum submitted on June 12 ahead of the hearing on the restraining order, both Binance.US and Zhao denied the allegations that the funds were ever mismanaged. They accused the SEC of ‘failing to identify any instance’ in which Binance.US customer funds were ever misused.

– Indeed, there is no ’emergency’ here at all, except for the one that the SEC is amplifying for its own purposes – said Binance.

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