Judge Denies Motion to Restrict SEC’s Public Statements

A federal magistrate presiding over the case between Binance.US, Binance Holdings Limited, and CEO Changpeng “CZ” Zhao and the United States Securities and Exchange Commission (SEC) has denied a motion that would have prevented the financial regulator from issuing public statements regarding the case.

In a ruling issued on June 26 in the U.S. District Court for the District of Columbia, Judge Amy Berman Jackson deemed it unnecessary for the court to intervene on the premise of a motion filed by parties affiliated with Binance and Binance.US.

The legal team filed a motion on June 21, alleging that the SEC misled the U.S. public with its statements regarding the securities litigation, which had the potential to “taint the jury pool” and “introduce unwarranted confusion into the marketplace.”

Judge Jackson stated, “While all lawyers, in this case, should adhere to their ethical obligations at all times, it is not apparent that Court intervention is necessary at this time to reiterate that point, nor is it necessary or appropriate for the Court to intervene in the wording of the parties’ press releases.”

“It is also not evident that the agency’s public relations efforts to date will significantly impact the proceedings in this case.”

The complaint stems from a press release issued by the SEC on June 17, in which Enforcement Director Gurbir Grewal asserted that CZ and Binance could “commingle customer assets or divert customer assets as they please.”

The legal teams for Binance and Binance.US stated that the SEC’s statements were “misleading” and denied the allegations.

The SEC filed a lawsuit against Binance, Binance.US, and CZ on June 5, alleging that the exchanges offered unregistered securities to U.S. customers and that Binance did not register as an exchange or broker-dealer clearing agency.

The federal regulator initially filed a motion to have the court freeze all Binance.US assets but ultimately reached a compromise wherein only exchange personnel could access client funds.

Binance has continued its global operations, declaring on June 20 the launch of a regulated cryptocurrency trading platform in Kazakhstan.

The Belgian Financial Services and Markets Authority ordered the exchange to cease offering crypto exchange and custody wallet services on June 23. Binance has reportedly withdrawn its application with Austria’s financial regulatory authority.