Following the U.S. Securities and Exchange Commission’s (SEC) lawsuit against Binance, a federal judge has denied the SEC’s request for an emergency temporary restraining order (TRO) that would have allowed it to freeze Binance.US’s assets.
Instead, U.S. district court Judge Amy Berman Jackson signed off on an agreement that incorporates provisions Binance agreed to when the lawsuit was filed, a June 17 Cointelegraph report said. Under the terms of the agreement, global Binance employees will not have access to certain data pertaining to users on the Binance.US platform, such as the keys to wallets. Binance users in the U.S. will still be able to withdraw their funds while the litigation is ongoing.
Securities law expert James Murphy has called the agreement a win for Binance.
"SEC and @Binance agree on Order securing U.S. customer assets," Murphy said in a June 17 tweet. "I would put this in the win column for the @Binance defendants. The consent order is very close to what Binance offered to the SEC at the outset. The important thing is--this is a consent decree and not a Temporary Restraining Order. Why does that matter? This means the Judge will Not make an early determination that the SEC has a 'substantial likelihood of success on the merits' if the case were to proceed to trial. The case will move forward with no early court determination that $BNB (or any other asset on Binance platforms) is likely to be a security. Good job by the @Binance legal team."
Binance.US responded via social media to the judge’s decision.
“We are pleased to inform you that the Court did not grant the SEC’s request for a TRO and freeze of assets on our platform which was clearly unjustified by both the facts and the law,” the company said in a June 17 tweet.
The judge said during the hearing that Binance’s “memorandum raises a lot of legitimate questions and concerns about the merits and about whether litigation is the best method to get at this highly disputed issue that affects billions of dollars already invested on multiple platforms in the U.S. and elsewhere,” according to a transcript of the court proceedings. She stated the memo also pointed out that the SEC has not presented any evidence to back up its claim that Binance customers’ funds are at risk or are being misused. The judge said Binance’s memo states “that there's no evidence, absolutely no evidence of any dissipation of assets whatsoever. And the government at this point has said they haven't seen the evidence of offshore transfers from BAM Trading itself.”
Binance.US highlighted the court’s takeaway regarding the lack of evidence the SEC had to back up its claim.
“There has never been any evidence presented by the SEC concerning mis-use of customer assets,” Binance.U.S. said in its tweet. “In fact, the SEC lawyers conceded in Court earlier this week, when asked by the Judge, that they had no evidence suggesting that any such thing had occurred.”
Binance.U.S. went on to criticize the SEC’s approach to policing the crypto industry.
“The SEC’s request would have effectively shuttered our business, which is consistent with the agency’s continued attempts to kill the crypto industry by any means, even by making allegations that are not supported by the facts,” the company continued in the tweet. “This fight has damaged our business and our reputation but not our fighting spirit or our resolve to defend ourselves against unwarranted charges and ‘regulation by enforcement’ tactics that do not belong in our system of justice. We look forward to continuing to defend ourselves in court.”
Murphy founded the law firm Murphy & McGonigle in 2010, representing clients in the securities and banking industries, according to his website. In 2021, the firm was recognized as Law Firm of the Year in securities regulation by US News/Best Lawyers in America. Additionally, Murphy was awarded Lawyer of the Year in securities regulation in 2021 and 2022. The firm has offices in Chicago, New York, San Francisco and Washington, D.C.