- Binance.US has said that there is no evidence of it commingling funds
- The exchange filed its first defence against the SEC this week
- In the filing, Binance.US points to comments from the judge that shows the SEC contradicting itself
Binance.US has claimed that there is no evidence that it commingled funds on its platform and has used the SEC’s own statements against it to illustrate its point. In a filing made on Wednesday and alluded to by Binance CEO Changpeng Zhao, Binance.US points out that the Securities and Exchange Commission (SEC) was unable to give any examples of times when funds have been commingled or sent offshore, to which the judge agreed, which went a long way towards her denying the SEC’s freeze order.
SEC Admitted that Commingling “Hasn’t Happened Yet”
Having escaped its asset freeze order, Binance.US has now set about arguing its case. In its first defence filing, the exchange points to what it perceives as a lack of evidence from the SEC over the issue of the commingling of funds. In one of these examples, Judge Jackson asked the SEC to show examples of when funds had been moved offshore or to Zhao’s personal accounts as the SEC alleged in order to facilitate such commingling. The SEC’s lawyers were forced to admit that “it hasn’t happened yet, your honour.”
This led Judge Jackson to summarize that:
SEC’s statement that Defendants have been ‘able to commingle customer assets or divert customer assets as they please’ is directly contradicted by the SEC’s statements to the Court that the SEC has no evidence of that ever occurring.
This opinion goes some way to vindicating the protestations made by Zhao and Binance.US, and increases the pressure on the SEC to prove its accusations rather than try to frighten exchanges into shutting up shop.
Of course, this comment is just a drop in the ocean of the entire court case, but with the SEC being forced to admit that the crimes Binance is alleged to have committed haven’t actually taken place yet, it raises the intriguing possibility that this part of the case might be dismissed unless the SEC can produce evidence to back up its claims.
