SEC Goes For The Knockout With Binance, But Judge Isn't Having It, Orders Mediation On Asset Freeze

A federal judge in the United States has mandated that cryptocurrency exchange Binance BNB/USD, its U.S. branch Binance.US and the Securities and Exchange Commission partake in a mediation conference Wednesday.

The aim is to negotiate and reach an agreement regarding operational restrictions during the ongoing regulatory lawsuit against the two Binance entities, Coindesk reported.

The SEC, in its lawsuit, accuses Binance and Binance.US of engaging in the sale of unregistered securities, which is a violation of U.S. laws.

Consequently, the SEC sought a temporary restraining order to halt activity on Binance.US's assets.

During a hearing on Tuesday, D.C. District Court Judge Amy Berman Jackson opined that if the involved parties could agree on certain limitations, there would be “absolutely no need” for a restraining order.

Prior to the hearing, Binance.US said that freezing the company's assets would be detrimental and effectively put an end to its operations.

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By negotiating limitations, the company believes it could continue its operations for the time being.

During the hearing, Jackson raised concerns regarding the impracticality of scheduling another hearing within two weeks due to the sheer volume of documents and exhibits received, which would require extensive review.

“What I'm looking for is some variation of what we already have. I think the nitty gritty of it ... is better handled by all of you than by me," the judge reportedly said, further suggesting that an order imposed by her may not meet the expectations of either party involved.

On Wednesday, it was announced the initial mediation session is scheduled for 2:45 p.m. ET and will be presided over by Magistrate Judge Zia M. Faruqui.

With experience as a former prosecutor who conducted several federal cryptocurrency investigations, Faruqui has in the past commended blockchain tracing technology and labeled the apprehensions regulators have toward "unhosted" crypto wallets (which are not tied to exchanges) as “fiction, not fact."

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