Binance, a leading cryptocurrency exchange, is fighting tooth and nail to overcome the ongoing pressure from the Securities and Exchange Commission (SEC). A recent ruling, in favor of the exchange, indicates the possibility of continuing operations without halting activities if a consensus is reached with the SEC.
Binance
In a last-minute development, the judge rejected the SEC‘s request to freeze Binance US assets. This doesn’t mean the issue is resolved entirely; instead, the judge’s decision mandates Binance and the SEC to work collaboratively towards business continuity without the need to freeze assets. As a result, Binance US is ordered to continue its operations as usual, with the requirement of publishing a detailed report concerning operational expenses and implementing a limited freezing operation if needed.
Binance US officials had stated that if the company’s assets were frozen, it would pose a challenge to their defense.
US District Judge Amy Berman Jackson is not in favor of closing the exchange while the SEC‘s lawsuit is ongoing. She directed the parties to work on a settlement agreement with a mediator. Binance US must now fulfill the necessary conditions and steer clear of any freezing decisions that could lead to a halt in operations in the forthcoming process.
The aftermath of last year’s LUNA collapse altered the landscape, and nothing remained the same. The incident triggered the bankruptcy of the crypto lending/borrowing system. High-risk investment firms, crypto hedge funds suffered a severe blow following this bankruptcy. As a result, companies like 3AC and others went bankrupt due to their inability to repay debts, leading to the bankruptcy of Celsius and others (crypto lenders).
Impacts of the FTX Crash
FTX exchange, in connection with these bankruptcies, declared its bankruptcy following losses on high-risk positions. Soon after, we saw Genesis (the largest crypto lender) go bankrupt. As the dominoes fell, regulators were watching the developments. They reprimanded crypto companies throughout Q4 2022, focusing on where they went wrong. SEC executives clearly stated that crypto companies would be in trouble in 2023 due to illegal activities.
Now the SEC is rolling up its sleeves. Armed with experienced personnel, they’re launching an attack on the top two crypto exchanges. The request to freeze Binance US assets is a significant move, even in terms of psychological superiority. The SEC is clearly saying they will protect the funds they couldn’t safeguard during the FTX collapse. However, while being exceedingly lenient towards their close associate Sam, they attack Binance (even at the risk of bankrupting it).
