The US arm of the world’s largest crypto exchange by trading volume says the U.S. Securities and Exchange Commission’s (SEC) recent lawsuit could potentially end its entire business.
According to new court documents, Binance says that if the SEC is able to freeze its assets, it will effectively put the firm out of business as it would no longer be able to fund any of its operations.
“If the Court does address the merits of the SEC’s motion, it should deny that motion. The SEC seeks unnecessary and unjustified relief. Far from requesting relief that is “carefully calibrated” to “maintain the status quo,” the SEC’s proposed remedies would effectively end BAM’s business.
The SEC seeks, among many other things, a draconian and unduly burdensome freeze of all the company’s operations without any exceptions. The requested relief would primarily harm BAM’s customers, effectively put BAM out of business, and prevent BAM from defending itself in this litigation.
Without the ability to pay its employees, vendors, suppliers, and professionals in the ordinary course of business and to maintain its technology platform, operations would quickly grind to a halt and BAM would be unable to even fund its defense to this action. With a freeze of all corporate assets, banking partners would most likely cease to honor requests to transfer funds for any purpose, including customer redemptions.”
According to Binance.US, customer assets are secure, appropriately segregated, and available to customers at any time, which is partially why the exchange argues the attempt to freeze its assets is unnecessary.
Binance’s lawyers also assert that the SEC’s lawsuit does not identify a single instance in which BAM customer assets were mishandled or misused, and also question the SEC’s notion that their application qualifies as an “emergency.”
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