The United States Securities and Exchange Commission (SEC) has remained persistent in its search for evidence that the world’s largest cryptocurrency exchange uses a backdoor to access user assets on its American arm, Binance.US.

According to a report from the Wall Street Journal, attorneys for Binance.US in the exchange’s court battle with the SEC asked the US Magistrate Judge Zia Faruqui to consider stopping the agency’s investigation for potential fraud.

SEC Persistent on Binance’s Fraud Allegations

Recall that the SEC sued Binance and Binance.US in June, accusing them of several securities law violations. Among the thirteen charges were allegations of operating an unregistered national securities exchange, broker-dealer, and clearing agency, market manipulation, illegal service to US clients from the Binance international platform, and diverting US customer assets through a back door.

The securities regulator accused the entities of commingling user assets and sending them to Sigma Chain and Merit Peak, two entities owned and controlled by Binance founder and former CEO Changpeng Zhao (CZ). Sigma Chain was also allegedly used to manipulate and artificially inflate Binance.US’s trading volume.

During the federal court hearing on Monday, Binance.US attorneys insisted there was no evidence that the exchange had misused user assets in any way. They argued that the SEC’s actions had stressed the trading platform. The exchange has lost almost half of its monthly users since the agency filed the lawsuit, and the average monthly value of its assets has plummeted by roughly 90% due to legal expenses.

“The SEC has no evidence that assets have been misused in any way,” Binance.US attorney Matthew Laroche argued.

Judge Says SEC’s Accusations Are Less Likely

Presiding over the matter, Judge Faruqui said the settlement deal and CZ’s guilty plea last week made it less likely that the former CEO would mishandle US customer funds.

The Department of Justice’s years-long probe into Binance recorded a significant milestone last week when CZ pleaded guilty to willfully floundering the Bank Secrecy Act and failing to implement a strong anti-money laundering program on the platform. While CZ agreed to step down from the position of CEO, Binance settled the charges with a $4.3 billion fine.

Judge Faruqui has asked the SEC and Binance.US to resolve their disputes and update him by December 15.

“At some point, I have to make a leap of faith and say enough is enough,” the judge told the SEC’s attorneys.

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