Binance’s motion alleging SEC misconduct denied by court.
- A US judge has said the court cannot make changes to the wording of the SEC and Binance’s press releases.
- However, Judge Amy Berman Jackson has stated that both parties must always follow their ethical obligations.
- The SEC sued Binance in June and released a statement alleging that user funds had been commingled.
Judge Amy Berman Jackson denied a motion filed by Binance to prevent the SEC from making public statements on the SEC/Binance case on June 26.
Binance claimed that the SEC had published misleading statements that could impact the case and taint the jury pool.
Three days after the filing, Judge Jackson ruled on the motion, stating that the court cannot alter either party’s press releases. Her order said:
” While all of the lawyers in this case should adhere to their ethical obligations at all times, it is not apparent that Court intervention to reiterate that point is needed at this time, or that it is necessary or appropriate for the Court to get involved in wordsmithing the parties’ press releases. Nor is it clear that the agency’s public relations efforts to date will materially affect proceedings in this case .”
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Binance questioned the SEC’s statements
Binance’s motion followed a press release by the SEC on June 21 in which the regulator reiterated its allegations of commingling of user funds by the exchange’s leadership.
These statements were made after the two parties reached an agreement on the handling of assets of Binance.US. The agency had filed for a freeze on the exchange’s assets suggesting the need to protect US customers.
In response to the SEC’s press release, Binance said that the regulator had published misleading facts about Binance and CEO Changpeng Zhao mishandling Binance.US customer funds.
The motion sought orders against the regulator – specifically, the motion wanted Judge Jackson to order counsel to comply with ethical obligations and not to make ” misleading extrajudicial statements that may materially impact court proceedings .”
“Not a great result for Binance”
John Reed Stark, Former Chief, SEC office of Internet Enforcement, commented on the court’s decision, suggesting that Binance’s filing may not have been worth it.
” It seemed so frivolous on its face and more akin to marketing theater than legal argument ,” he noted.
James “MetaLawMan” Murphy, a securities lawyer, said the judge’s order isn’t a great one for Binance – even if it doesn’t impact the merits of its case.
Judge Jackson has issued a brief order denying the @Binance motion before the SEC filed its response. The judge wrote that it was not necessary to reiterate both side’s obligations to comply with ethics rules, and she will not get involved in “wordsmithing the parties’ press…
— MetaLawMan (@MetaLawMan) June 26, 2023
Separately, the court set forth a timeline for the early proceedings. Binance will plead its case on September 21, 2023, before the plaintiff presents their legal arguments on November 7, 2023. The court will listen to replies starting December 12.
