The legal team of Binance told a judge on Wednesday that the Securities and Exchange Commission misled the public by claiming that the exchange commingled its global exchange funds with those held by its US subsidiary, Binance US. If proven, the court could bar the regulator from making certain public statements on the matter, as Binance says that it affects investor confidence in the market.
Rattling Binance customers
The June 21 motion by Binance said that the S.E.C.’s Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, claim that CEO Changepeng Zhao (CZ) commingled users’ assets at will, thus putting investors at risk of losing their funds, may be designed to cause panic among Binance customers.
The motion by Binance lawyers said that the SEC officials continued to claim that the company was spiriting out funds held by its US subsidiary, Binance US, despite court documents that suggest otherwise. The motion filed at the US District Court for the District of Columbia referred to the June 17 press statement by Gurbir, who alleged that Binance’s CEO and others were diverting funds held by Binance US to offshore companies.
Misleading the jury
The motion stated:
“The SEC has no evidence that BAM [Binance.US] customer assets have been dissipated, commingled, or misused in any way,” said the June 21 filing. “The SEC’s press release also appears to be designed to introduce unwarranted confusion into the marketplace, which could have the effect of harming BAM customers rather than protecting them. It also risks tainting the jury pool with misleading descriptions of the evidence concerning the defendants.
The motion is part of the ongoing lawsuit filed on June 5 against the cryptocurrency company by the Securities and Exchange Commission (SEC). At an earlier hearing, Binance lawyers could not convince the judge that funds were actually leaving the US from Binance US.