SEC says Binance, CZ ‘doubled down’ on illegal activity

The temporary restraining order is necessary because the defendants “knew that their conduct…was illegal,” the SEC says

article-image

Aleksandr Khmeliov/Shutterstock modified by Blockworks

share

The SEC continues to pursue a temporary restraining order which seeks to freeze the assets of BAM Trading and BAM Management — the entities operating Binance.US.

“At present BAM Trading states that it holds $2.2 billion in crypto assets (as well as hundreds of millions more in fiat currency) belonging to investors who have entrusted BAM Trading to custody those assets on the Binance.US platform,“ the SEC said in its latest filing

The original temporary restraining order, which was filed on Tuesday, June 6 has not been granted by the court yet. 

Outside of freezing the assets of Binance.US, the commission wants to ensure that “relevant documents” are not destroyed or tampered with and ensure that BAM Trading complies “with specified relief concerning the custody and control of customer assets, and refrain from transferring them other than in the ordinary course of business, provided such ordinary course transfers are not made to any entity or person affiliated with Binance or Zhao.”

The SEC goes on to say, “Zhao has deliberately engaged in concerted efforts to provide a crypto asset platform for U.S. investors while shunning the applicability of U.S. law to protect securities investors.”

The SEC believes that the temporary restraining order is necessary because the listed defendants “knew that their conduct with respect to U.S. investors was illegal and risked U.S. government enforcement actions. Instead of ceasing such illegal activity, Zhao and Binance doubled down.”

Since the SEC asked for the order, it’s filed transcripts of conversations with ex-Binance.US CEOs and previous auditing — backing up the SEC’s claim that Binance commingled company and customer funds. 

Binance has denied that it commingled funds

The commission is also looking to serve Binance CEO Changpeng “CZ” Zhao and Binance via alternative means due to previous comments and the lack of a known Binance headquarters.

In the filing, the SEC quotes Zhao as “dismissing such ‘traditional mentalities’ [of a known headquarters] by saying ‘what kind of horse is a car? So you have to have an office. Wherever I sit is going to be the Binance office. Wherever, wherever I meet somebody is going to be the Binance office. ‘You have to have an entity. You have to have a headquarters. You have to have a bank account.’ All those things [don’t] have to exist for blockchain companies.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates.png

Research

The convergence of DePIN and energy generation aims to address modern grid challenges by incentivizing distributed generation.

article-image

Togo activist Farida Nabourema is fighting back with Bitcoin

article-image

Roshan Robert told Blockworks that OKX brought him on back in September to plan out its US expansion

article-image

Could we stop using BTC to amplify our short-term risks — and start using it to hedge our long-term ones?

article-image

Sol Strategies will be the tokenized stock platform’s first listing

article-image

Craig Fuller, CEO and founder of FreightWaves, breaks down how tariffs are and will impact shipping and inventories

article-image

This limited-edition run of sparkling water is more for existing traders than crypto newcomers, but mainstream distribution is part of the plan.