Analyzing documents from accounts held by Binance, Binance US, and CZ at Silvergate and Signature Banks, the SEC accused Binance and Binance US of transferring more than $12 billion in customer assets to Merit Peak. believed to be owned by CZ) and from there transferred assets to a foreign branch of Paxos (BUSD issuer).
The SEC also accused Binance of transferring $11 billion in customer assets through another entity called Key Vision Development Limited.
The SEC did not specify the purpose for which Binance transferred money, but expressed concern that the above activities may cause Binance to not have enough assets to pay customers who need to withdraw money. That's why the SEC wants the court to freeze Binance US assets to protect customers' money.
Binance has denied the allegations and affirmed that all user assets on Binance and Binance US are always safe.
If this is still a civil lawsuit, Binance may just need to close its US branch and pay a fine to be done. However, if the US Department of Justice gets involved and turns this into a criminal lawsuit, the situation will be more tense for CZ & Binance.
The SEC also sued Coinbase, but the circumstances were lighter than Binance, such as violating the law by listing securities & providing staking services without registering as a broker with the SEC. And Coinbase also sued the SEC, the results of this lawsuit have many meanings, to reclaim fairness for the Crypto market. Urges officials to soon issue clear regulatory guidelines for the cryptocurrency industry.
The community has shown its support by minting more than 140,000 "Stand with Crypto" - NFTs initiated by Coinbase, a symbol of the cohesion of the cryptocurrency community, overcoming the legal battle with the SEC.