Binance.US Lost As Judge Rejects Its Accusations Of SEC Misleading Statements

Key Points:

• Binance’s attempt to limit the SEC’s use of terms relating to Binance.US’ handling of client money in press releases has been denied by Judge Amy Berman Jackson.
• The judge rejected the company’s accusations that the SEC’s extrajudicial statements were misleading.
• Binance’s attorneys had requested the judge to censure the SEC outside of court for biasing a jury, but the judge did not intervene.

A federal judge denied Binance’s attempt to limit the Securities and Exchange Commission’s (SEC) use of terms relating to Binance.US’ handling of client money in press releases, which the company contended may harm it in court.

On Friday, lawyers for BAM Trading, which trades as Binance.US, filed a complaint regarding the SEC’s news release, noting concerns about the SEC’s misleading extrajudicial statements.

Binance’s attorneys took issue with the SEC’s phrasing describing the alleged commingling or diversion of user money from trading platforms to investment entities that the agency claims CEO Changpeng Zhao controls.

Judge Amy Berman Jackson of the District of Columbia District Court, who is presiding over the SEC’s action against Binance.US, rejected the accusations, stating that the court’s mission is not to wordsmith public remarks from any of the case’s parties.

“It is not apparent that Court intervention … is needed at this time, or that it is necessary or appropriate for the Court to get involved in wordsmithing the parties’ press releases. Nor is it clear that the agency’s public relations efforts to date will materially affect proceedings in this case,” Judge Jackson wrote.

Last week, the company’s lawyers requested Berman Jackson to censure the SEC outside of court for its characterization of the alleged abuse of billions of dollars in client funds, arguing that the news release may bias a jury.

The SEC filed a complaint against Binance, Binance.US, and CZ on June 5, saying that the exchanges supplied unregistered securities to US users and that Binance failed to register as an exchange or a broker-dealer clearing agency. The federal regulator first requested that the court freeze all Binance.US assets but finally agreed to a compromise in which only the exchange’s workers would have access to customer cash.

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Harold

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