Binance Goes to Court Against the SEC

Binance, Binance.US and Changpeng "CZ" Zhao published their first responses to the SEC’s lawsuit against them and, taken at face value, the stakes appear to be dire. But by the end of the day, we may get a better sense of how the case is proceeding and what a judge thinks about the arguments so far.

In a significant development, Binance, Binance.US, and Changpeng "CZ" Zhao have issued their initial responses to the lawsuit filed against them by the U.S. Securities and Exchange Commission (SEC). The responses shed light on the potential implications of the case, while today's court hearing will offer insight into the judge's perspective on the arguments presented thus far.

CoinDesk's correspondent is in Washington, D.C., covering the SEC v. Binance hearing regarding a temporary restraining order. While coverage is limited to today's proceedings, those present at the D.C. District Court are welcome to connect.

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Early Arguments

The Narrative

On Monday, Binance.US and Binance filed their initial responses to the SEC's allegations, emphasizing that the regulator's request for a temporary restraining order would hinder their ability to pay employees, vendors, and other parties. The filings also offered a glimpse into their defense against the actual charges levied by the SEC.

Why It Matters

The SEC's allegations against Binance last week were severe, and this court hearing will mark the first test of the agency's claims.

Breaking It Down

Binance.US submitted a forceful response to the SEC's restraining order motion, warning that the requested relief could potentially spell the end of their business. The filing labeled the proposed temporary restraining order as "draconian," stating that it sought unnecessary and unjustified remedies.

District Judge Amy Berman Jackson, presiding over the D.C. District Court, instructed Binance and Binance.US to outline any discrepancies in their proposed stipulations by 1:00 p.m. ET (17:00 UTC), just an hour before the hearing was scheduled to commence. Judge Jackson also requested that the SEC specify the modifications it deems necessary in the Binance.US proposal to make it acceptable as an alternative to the proposed restraining order.

The judge's minute order provides some insight into how she might approach the initial issues of the lawsuit. While it suggests that Judge Jackson may be reluctant to grant a full restraining order, it indicates a willingness to impose restrictions on accessing Binance.US funds.

Notably, there are no substantial differences between the proposed stipulations of Binance.US and Binance. The variations mostly pertain to capitalization, although the Binance filing specifies root access to Amazon Web Services instances, which may be relevant to the software involved. The SEC's filing calls for the restrictions to extend to staking services and AWS access.