In the ongoing case between the United States Securities and Exchange Commission (SEC) and Binance US, the exchange has put serious allegations on the regulator. The lawyers representing the Binance Holdings, Binance US and CEO Changpeng Zhao (CZ) have filed a motion alleging the SEC misled the public in statements issued over an ongoing securities lawsuit.

On Wednesday, in a court filing in the U.S. District Court for the District of Columbia, the legal teams for Binance, Binance.US and CZ claimed the SEC had made “misleading” statements in their press release and filed a motion for the financial regulator to comply with “applicable rules of conduct.” The filing outlined the statements from Gurbir Grewal, SEC director of enforcement, wherein the regulator claimed CZ and Binance could “commingle customer assets or divert customer assets as they please” and an order requiring all parties involved in the lawsuit to return to the United States. The filing stated:

The SEC has no evidence that BAM [Binance.US] customer assets have been dissipated, commingled or misused in any way. The SEC’s press release also appears to be designed to introduce unwarranted confusion into the marketplace, which could have the effect of harming BAM customers rather than protecting them. It also risks tainting the jury pool with misleading descriptions of the evidence concerning the defendants.

Reportedly, the order, if approved by a federal judge, could prevent the SEC from issuing certain public statements on the Binance lawsuit for the duration of the case that “may materially impact court proceedings.” In their evidence, the Binance legal team provided part of a transcript of a June 13 hearing in which counsel for the SEC acknowledged that there was no evidence that assets from Binance.US were “going offshore.”

The SEC’s press release is misleading, contains statements that the SEC knows to be unsupported by evidence, and is inconsistent with the rules of professional conduct.

Lmao @ Binance v. SEC #FireGenslerCourt: "I want to know, are BAM assets going offshore? Is it happening or is it not? It's stunning to me that I've now asked this question to each of the SEC attorneys 5 times."SEC: "So currently the assets are not going offshore… We're not… pic.twitter.com/QkEY5HM2ji

— Tree of Alpha (@Tree_of_Alpha) June 21, 2023

As evident the recent court filing from Binance comes amid its legal battles with the SEC. On June 5th, the SEC filed 13 charges against the exchange, including unregistered offers and sales of the stablecoins – BNB and BUSD, its services namely the Simple Earn and BNB vault products, and its staking program. Additionally, the regulator claimed in its suit that Binance failed to register its online platform as an exchange or a broker-dealer clearing agency.

It added that the funds from Binance and Binance.US were commingled into an account controlled by CZ-associated Merit Peak Limited. While CZ denied those charges, the SEC demanded permanent suspension of Binance and CZ from further activities, disgorgement of ill-gotten gains with interest, and financial penalties.

A day after the lawsuit, the SEC filed an emergency motion to freeze the assets of Binance US. While the motion didn’t pass through the US court and the judge ordered both entities to settle, the SEC had requested the court to order Binance and CZ to provide essential financial data.

In the mutual settlement between the SEC and Binance, the exchange successfully avoided freezing of assets and settled on repatriation of funds to the US. While the exchange was largely criticised for its anti crypto approach, certain incidents including leaked chats of Binance employees put exchange’s image into question. Simultaneously, the French authorities are investigating the exchange for money laundering for which the US DoJ is also investigating the exchange.

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