The US Securities and Exchange Commission (SEC) has filed a motion to freeze digital assets held by Binance, Binance.US and personally by the CEO of the exchange, Changpeng Zhao.
When filing the lawsuit, the regulator had already tried to block the company’s cryptocurrency, but filed an application in the form of a temporary restraining order to expedite the case.
The commission called for an asset freeze following allegations by executives and Zhao himself of diverting client funds to his own investment funds. According to the SEC, the money was used to buy a $11 million yacht and BUSD stablecoins.
“The SEC respectfully states that this assistance is needed on an expedited basis to ensure the safety of client assets. […] We take into account the defendants’ years of experience in violating, defying US laws, evading regulatory oversight and open questions about various financial transfers, custody and control of client assets, ”the regulator said in a statement.
At the same time, the SEC allowed Binance.US clients to buy assets from the company.
The American division of the exchange published an appeal on Twitter, in which it called the agency’s actions “unreasonable.” Representatives of the platform assured that customer funds are safe.
This afternoon, the SEC filed a motion seeking a TRO and preliminary injunction against https://t.co/AZwoBOgsqS attempting to, amongst other things, freeze https://t.co/AZwoBOgsqS corporate assets. User assets remain safe and secure and the platform continues to be fully…
— Binance.US 🇺🇸 (@BinanceUS) June 6, 2023
“Despite years of service, SEC officials have expressed no concerns about the security of client assets. […] We are disappointed with this action and look forward to being defended in court,” the company said.
On June 5, the SEC sued Binance and Changpeng Zhao. The regulator brought 13 charges, including the sale of unregistered securities.
Reports later emerged that the Commission’s claims were similar to those brought by the agency against the failed crypto exchange FTX and its subsidiary Alameda Research.
Recall that on June 6, the SEC filed a lawsuit against the Coinbase exchange. The regulator also alleges that the platform violated securities laws.
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