The Blubber

In an urgent move, the Securities and Exchange Commission (SEC) has filed a motion in a federal court in Washington, D.C., seeking to freeze the assets of Binance's U.S. platform and repatriate both fiat currency and cryptocurrencies held by its customers. It's important to note that the freezing order only applies to Binance's two U.S. holding companies and not to its non-U.S. regulated international exchange. If approved, the order would affect numerous accounts held at Axos Bank, the now defunct Silvergate Bank, Prime Trust, and other financial institutions.

According to the SEC, two foreign entities controlled by Binance's founder, Changpeng Zhao, namely Sigma Chain and Merit Peak, served as intermediaries for customer funds amounting to billions of dollars, which were improperly mixed with Binance's own funds. The SEC's lawsuit, filed on Monday, accuses Binance and Zhao of various wrongdoing, including fraudulently deceiving investors, mishandling funds, and operating as an unregistered broker, dealer, and clearinghouse.

The SEC argued that an emergency restraining order was necessary to prevent the dissipation of assets that could be used to settle any potential judgments against the Defendants, considering their history of violating U.S. laws and showing disregard for them.

Furthermore, the restraining order also requires Changpeng Zhao to provide a justifiable reason why a preliminary injunction should not be issued against him and his two holding companies. Additionally, all three entities are prohibited from destroying any evidence.