On Tuesday, a day after announcing its lawsuit against Binance and its CEO, the SEC filed an emergency motion to freeze the cryptocurrency held by the exchange’s US affiliate. The Commission is also seeking to freeze the holdings of multiple BAM entities that operate Binance.US
SEC Request the Freezing of BAM Assets “on an Expedited Basis”
On June 6th, the Securities and Exchange Commission filed a motion to freeze the assets of BAM Management US Holdings Inc. and BAM Trading Services Inc. The entities were sued a day earlier along with the rest of Binance, as well as its CEO, Changpeng Zhao.
The initial complaint also revealed the intent to seek the freezing of assets held by Binance’s US affiliate. According to the Commission, the freezing is necessary to achieve several goals:
(iv) prohibiting Defendants from destroying, altering, or concealing relevant records;
(v) requiring sworn accountings from Defendants;
(vi) ordering expedited discovery;
(vii) authorizing alternative means of service; and
(viii) ordering any other equitable relief necessary to protect investors and effectuate
the requested relief.
Additionally, the SEC states that the request was filed “on an expedited basis” to guarantee the security of users’ assets. Furthermore, the SEC also justifies its request by describing Binance’s prior behavior as volatile, evasive, and without regard to US laws.
SEC Files Major Lawsuit Against Binance and CZ
The motion to temporarily freeze the assets of BAM entities comes a day after the SEC unveiled a major lawsuit against Binance. In the lawsuit, the Commission alleges the exchange committed a large number of wrongdoing including comingling users’ assets, wash trading, and offering unregistered securities.
Binance has been under significant pressure from US regulators even before the SEC lawsuit as the CFTC filed its own complaint against the cryptocurrency exchange earlier in 2023. Additionally, the company revealed in February it is expecting to pay at least some penalties to settle its issues with the authorities in the US.
In the immediate aftermath of the lawsuit, Binance expressed both its disappointment with the SEC and its intent to defend itself against the regulator. The crypto community also reacted strongly to the lawsuit with many prominent figures in the industry including Justin Sun and Charles Hoskinson who assessed the move appears to be “the next in a series of steps to implement chokepoint 2.0”.
This article originally appeared on The Tokenist
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