United States District Judge Amy Berman Jackson has ordered Binance.US and the United States Securities and Exchange Commission (SEC) to negotiate a compromise to prevent the exchange’s assets from being frozen.
Bloomberg reported on June 14 that U.S. District Judge Amy Berman Jackson referred the two organizations to a magistrate judge to negotiate a compromise to protect consumer funds without closing the exchange.
“Completely shutting it down would have significant repercussions for both the company and the digital asset markets in general,” Jackson stated at a June 13 hearing.
Judge Jackson stated that she would only decide on the SEC’s motion for a temporary restraining order once the parties resolved their differences with the magistrate.
A status report on the negotiations with the magistrate is scheduled for the close of business on June 15.
She also mentioned that the SEC and Binance.US appeared to be “not that far apart” in reaching an agreement.
Before Judge Jackson ruled at the hearing, former SEC enforcement attorney John Read Stark informed his 20,000 Twitter followers that there was “considerable disagreement between what each party hoped to achieve.”
“That does not mean the judge cannot order a compromise and find common ground,” Stark clarified.
On June 6, the SEC filed an emergency motion for a provisional restraining order against Binance.US, alleging that Binance CEO Changpeng “CZ” Zhao had access to customer funds.
The regulator alleged that Zhao transferred $12 billion of Binance’s funds through Merit Peak, an entity he controlled.
In a joint memorandum dated June 12 and submitted before the hearing on the temporary restraining order, Binance.US and Zhao denied claims that funds were ever mismanaged. They accused the SEC of being “unable to identify a single instance” of misappropriating Binance.US customer funds.
“Indeed, there is no ‘emergency’ here at all, other than the one manufactured by the SEC for its own purposes.”
