Binance Update: SEC Negotiations Commence in the US, While Exchange Faces Additional Hurdle in Cyprus

  • A U.S. federal judge denied the SEC’s request to freeze Binance.US’ assets, contingent on the parties reaching an agreement on limits.
  • Binance’s Cyprus unit under scrutiny for potential deregistration as a crypto service provider

Binance vs SEC

A U.S. federal judge has instructed Binance and its local affiliate Binance.US to engage in a mediation conference with the Securities and Exchange Commission (SEC) to address operational restrictions amid the ongoing regulatory case. The SEC’s lawsuit accuses the Binance entities of selling unregistered securities, prompting the request for a temporary restraining order to freeze Binance.US’ assets. However, Judge Amy Berman Jackson stated during a hearing that if the parties could agree on limits, such an order would be unnecessary. Binance.US expressed concerns that asset freezing would essentially halt their operations, emphasizing the importance of negotiating limits to enable continued business activities.

During the hearing, Judge Jackson expressed concern about the court’s limited time to review the extensive documents and exhibits, given the requirement for another hearing within two weeks. She emphasized her preference for a variation of the existing arrangement, suggesting that the intricacies of the case would be better handled by the involved parties rather than herself. Judge Jackson acknowledged that an order crafted by her might not satisfy either party.

In a subsequent order issued on Wednesday, the first mediation session was scheduled for June 14 at 2:45 PM Eastern Time. Magistrate Judge Zia M. Faruqui, renowned for conducting federal crypto investigations during his tenure as a former prosecutor, will oversee the session.

Notably, Faruqui has previously lauded blockchain tracing technology as a powerful tool and dismissed concerns among regulators regarding “unhosted” crypto wallets held outside of exchanges as unfounded.

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Binance Cyprus Unit Under Investigation

Binance’s Cyprus unit is currently under investigation and may face deregistration as a crypto service provider, as reported by the Cyprus Securities and Exchange Commission website. The website states that Binance is currently being examined regarding its application for deregistration, without specifying the reason for the potential change. Binance has not yet responded to CoinDesk’s request for comment on the matter.

Last year in October, Binance successfully obtained registration as a crypto asset service provider (CASP), allowing it to offer various services in Cyprus, including spot trading, custody, staking, and card services.

It will be interesting to see how Binance tackles this next challenge in Cyprus while simultaneously dealing with the ongoing tussle with the SEC regarding Binance US.

Bitcoin is So Much More than Binance says Jan 3 CEO

Bitcoin advocate and Jan3 CEO Samson Mow argues that the Bitcoin market extends beyond major exchanges like Binance and Coinbase. Mow explains that private trading channels, such as peer-to-peer (P2P) and over-the-counter (OTC) deals, play a significant role in Bitcoin trades, which are not captured in exchange volume data.

“You kind of have this black box around Bitcoin. You don’t really know how much the market is total. If Bitcoin functions as P2P, you’re not going to quantifiably measure how much Bitcoin is traded.”

CoinGecko confirms that it only tracks trades occurring on exchanges and does not include P2P platforms and brokerages. Mow’s statements challenge the perception that exchanges dominate the Bitcoin market, suggesting a more diverse and decentralized landscape. In a previous report, K33 Research claimed that Binance handled 92% of the Bitcoin spot market in 2022, but Mow’s remarks and CoinGecko’s limitations shed light on the broader market dynamics.

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