The business of Binance.US, a cryptocurrency trading platform set up by Binance chief Changpeng Zhao to serve U.S. clients, “would quickly grind to a halt” if a court rules in favor of a Securities and Exchange Commission’s (SEC) request last week to freeze the firm’s assets, the company said Monday in a court filing.
See related article: The SEC has spoken: The future of finance is not in America
Fast facts
- In the Monday filing, Binance.US urged the federal judge to deny the SEC’s motion to freeze the assets of the entities that operate Binance.US after the SEC sued Binance and Zhao on June 5 for alleged unregistered offers and sales of securities.
- “With a freeze of all corporate assets, banking partners would most likely cease to honor requests to transfer funds for any purpose, including customer redemptions,” Binance.US said in the Monday filing.
- The exchange noted in the filing that “this has already happened” as one of its banking partners had informed the company that it would no longer service the company starting June 14.
- The company reiterated in the filing that its customer assets “are secure, appropriately segregated, and available to customers.”
- On Friday, Binance.US said it has suspended U.S. dollar deposits to “protect customers” amid intensifying regulatory pressure.
- Liquidity, or market depth, on Binance.US has plunged nearly 80% over the past week since the lawsuit as market makers and traders “fled the exchange en masse,” crypto data analysis firm Kaiko said Monday.
- “On June 4, the day before the SEC lawsuit, market depth was US$34 million. Today, market depth is just US$7 million,” Kaiko added.
- Binance.US has hired four additional lawyers, including former SEC enforcement official George Canellos, to defend itself in the lawsuit, Bloomberg reported on Monday.
See related article: Crypto industry reacts to SEC’s lawsuit against Binance
