The US Securities and Exchange Commission (SEC) has filed a lawsuit against Binance, one of the world’s largest cryptocurrency exchanges, and its subsidiaries BAM Management and BAM Trading. The lawsuit includes violations of the Exchange Act, the Securities Act, and potential fraud allegations. The SEC has also requested a temporary restraining order that could freeze the assets of Binance’s US-based platform, Binance.US. Meanwhile, just before all these accusations, a mysterious transaction drew attention.
Before the Binance lawsuit, this ETH transaction attracted attention
Shortly before news broke of the SEC’s lawsuit against Binance, an Ethereum (ETH) holder quickly sold 10,265 ETH, equivalent to about $19.1 million, causing a significant short-term market crash. The average selling price of these ETH tokens is reported to be $1,861.
The SEC took their legal action further by petitioning a court for a temporary restraining order against Binance, BAM Management, and BAM Trading. The order aims to freeze the assets of Binance’s US platform and prevent the relevant records from being destroyed, altered or concealed by the defendants. Also, if approved, the restraining order would enable the SEC to initiate an “expedited discovery” of potential evidence. The regulator stressed the urgency of a quick resolution to protect client assets and prevent the dispersal of existing assets that could affect potential decisions.
“Funds are safe,” according to the exchange
The SEC’s lawsuit highlights that Binance and its affiliates alleged “decades of infringing behavior”, ignoring US law, evading regulatory oversight, and financial transfers related to client accounts. The regulator intends to hold Binance accountable for these actions. In response to the SEC’s lawsuit, Binance.US has issued a statement reassuring users that their assets are safe and secure. The platform stressed that it continues to operate fully with the normal functioning of deposits and withdrawals.
The SEC’s legal action also includes a “return” request regarding oversight and control of both fiat currency and crypto assets held or accrued by clients on the Binance.US trading platform. The regulator aims to ensure that client assets are protected and funds held by BAM and Binance.US are used appropriately. The SEC’s lawsuit against Binance and its affiliates and the request for a temporary restraining order caused significant market turmoil. As the legal battle continues, the fate of Binance’s assets and the possible consequences for its US-based platform remain unclear. Traders and investors will be keeping a close eye on developments as regulatory actions continue to shape the cryptocurrency industry.
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