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- The Judge ruled that the SEC failed to show that Binance US participated in wash trading that ostensibly misrepresented trading volume on the exchange.
- Binance native token rallied nearly 5 percent in the past 24 hours to trade around $247 on Wednesday.
The crypto regulatory fiasco between the United States Securities and Exchange Commission (SEC) and Binance US has threatened to push the crypto market to last year’s lows. Market data shows Bitcoin liquidity continues to shrink as more traders withdraw their assets from centralized exchanges to non-custodial wallets to avoid possible asset freezes.
Nevertheless, the crypto market is ready for mainstream adoption amid increased regulatory scrutiny that can instill confidence in most investors.
Closer Look At Legal Fight Between Binance US and the SEC
Earlier last week, the United States SEC accused Binance US in a legal action of operating an illegal securities exchange. However, Binance US and Changpeng Zhao (CZ) have vehemently denied the accusations and their legal representatives have indicated they are ready to defend their case in a court of law.
In the latest updates, the United States SEC and the Binance US defendants have each submitted draft orders of what each party wants the Judge to order in the SEC/Binance Emergency Asset Freeze Enforcement Action. As a result, United States District Judge Amy Berman Jackson has ordered both parties to work towards a compromise that avoids asset freeze.
Notably, Judge Jackson wants the exchange to continue operating normally to avoid stuttering the crypto industry, which could devastate a lot of users. The Judge noted:
Shutting it down completely would create significant consequences not only for the company but for the digital asset markets in general
The decision has been warmly welcomed by the Binance and BNB community. Moreover, the Binance native coin BNB gained approximately 5 percent in the past 24 hours to trade at around $247 on Wednesday.
🚨BREAKING🚨
Judge ordered #Binance US and the #SEC to come to an agreement but with condition that Binance US must continue operating normally. This technically ruled out any asset freeze. Good news for crypto!
— Capo WSB (@Capo_WSB) June 13, 2023
Notably, the Judge concluded that the SEC lacked to provide enough evidence on allegations that Binance US through Sigma Chain was involved in wash trading. In forex trading, wash trading is referred to the practice of a market maker fulfilling both short and long trades without the presence of demand trades thus inflating the underlying volume to lure secondary investors. In this regard, Sigma Chain operates as a market maker for BAM Trading Services, the holding company of the Binance US exchange. The Judge ruled.
The SEC has fallen far short of showing that a freeze of all of BAM’s assets without any exceptions is appropriate. … Given the SEC’s total lack of evidence of any dissipation of assets, its request must be denied. Moreover, to the extent the SEC’s concern is that assets might be transferred to Defendants BHL or Zhao, BAM has already agreed not to do so and Defendants proposed an order to that effect.
