SEC Approved by Court for Emergency Relief on Assets Held by Binance

The Securities and Exchange Commission (SEC) has received court approval for emergency relief regarding assets held by Binance for US customers.

The SEC states that all defendants in its litigation against Binance Holdings Limited, BAM Management US Holdings Inc., BAM Trading Services Inc., and Changpeng Zhao have agreed to repatriate the assets of customers of Binance.US.

Earlier this month, the SEC filed an enforcement action against Binance and its affiliated entities alleging the operation of  unregistered national securities exchanges, broker-dealers, and clearing agencies, and more.

The court order:

(1) requires all of the defendants to repatriate to the United States assets held for the benefit of BAM’s U.S. customers;

(2) requires BAM to maintain U.S. customer assets in the United States for the duration of the litigation and to facilitate customer withdrawals;

(3) expressly prohibits BAM from transferring any assets or funds, or from providing control over such assets or funds, to co-defendants Binance Holdings Limited, Changpeng Zhao, or their affiliates;

(4) restricts BAM from spending assets or funds except for ordinary course business expenses and requires BAM to provide the SEC with oversight over such expenses;

(5) prohibits all of the defendants from destroying records;

(6) requires all of the defendants to submit expedited sworn accountings of certain assets to the SEC; and (7) requires all of the defendants to submit to expedited discovery by the SEC on the custody and security of customer assets.

The order from the United States District Court for the District of Columbia also prohibits defendants BAM Trading Services Inc. and BAM Management US Holdings, Inc. from spending corporate assets other than in the ordinary course of business.

Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, said that, as alleged, funds have been commingled, and the prohibitions are essential to protect customer assets.

“Further, we ensured that U.S. customers will be able to withdraw their assets from the platform while we work to resolve the alleged underlying misconduct and hold Zhao and the Binance entities accountable for their alleged securities law violations.”


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