Defendants in the SEC’s case against Binance allege misconduct by the agency in publicly communicating the case.
Lawyers for US-based crypto exchange Binance.US, global crypto exchange Binance Holdings Limited and Binance CEO Changpeng “CZ” Zhao have filed a filing alleging that the US Securities and Exchange Commission (SEC) has censored the public in its communications on the criminal case against the three defendants misled.
In a related June 21 filing in the U.S. District Court for the District of Columbia, attorneys for Binance, Binance.US and CZ allege that the SEC made “misleading” statements in a June 17 press release and are therefore requesting that the financial supervisory authority should comply with the “applicable rules of conduct”. The filing primarily relates to SEC Law Enforcement Director Gurbir Grewal alleging that CZ and Binance may have “embezzled or concealed customer funds” and an order requiring all parties involved in the lawsuit to return to the United States obligated.
“The SEC has no evidence that BAM [Binance.US] customer funds were embezzled, commingled or misused in any way,” the attorneys’ statement read on June 21. And further: “The SEC press release also appears designed to create unwarranted confusion in the market, which could result in BAM customers being harmed rather than protected. There is also a risk that the jury will be presented with misleading descriptions of the facts.”
If the motion is granted by a federal judge, the SEC could be barred from making certain public statements about the Binance lawsuit that “could materially affect the court proceeding” during the course of the trial. The Binance legal team provides, in support of their arguments, part of a transcript of a June 13 hearing in which the SEC’s attorney conceded that there was no evidence that Binance.US assets “went abroad.”
“The SEC’s press release is misleading, contains statements the SEC knows are not supported by evidence, and is inconsistent with professional conduct.”
The court filing is part of the SEC’s ongoing lawsuit against Binance, Binance.US and CZ, filed June 5, alleging unregistered securities offerings and Binance’s failure to certify itself as an exchange or broker-dealer clearinghouse to register. SEC Chairman Gary Gensler said at the time that CZ and Binance had “deceived investors about their risk co-management,” prompting the regulator to seek damages and penalties from the crypto company, among other things.
The SEC also requested that the court freeze all Binance.US assets, but eventually settled on a compromise that still allows exchange employees to access customer funds while the litigation is ongoing. Amid the legal battle in the US, Binance announced the launch of a regulated crypto platform in Kazakhstan.
Picture Copyright: peshkova
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