In a packed Washington courtroom, Judge Amy Berman Jackson of the D.C. District Court declined to order a temporary restraining order freezing the U.S. trading platform’s assets of Binance and Binance.US. This would allow the U.S. arm of the company to continue doing business while hashing out restrictions with the regulator. The judge ordered Binance.US to provide a list of its business expenses to the court, and ordered the parties to continue negotiating. A status update is due by close of business Thursday.
We are open to the business continuing to operate, said Jennifer Farer, an SEC lawyer. Representatives of Binance.US said they mainly wanted to be allowed normal operating expenses and that they were not willing to accept the death penalty represented by a total asset freeze.
The SEC sued Binance and Binance.US, alongside Binance founder Changpeng CZ Zhao, last week, alleging they were operating as an unregistered securities exchange, brokerage, and clearing agency. The regulator also alleged massive commingling of funds allowing Zhao, a Canadian national living in the UAE, access to Binance.US customer assets.
Judge Jackson also dove into the foundational question at the heart of the suit: What makes a crypto asset a security, and is it a commodity if it isn’t a security? Though the judge asked some elementary questions about the issue, she was not satisfied with the answers.
At the end of the day, the parties were not that far apart, Judge Jackson said. If they could find an agreement, that would give all parties time to properly sort through the case’s details.