The United States Securities and Exchange Commission is still looking for evidence that Binance.US had a backdoor to potentially control customer assets in a similar style to FTX, according to a Nov. 27 report by the Wall Street Journal.

In June, the SEC filed a lawsuit against Binance and Binance.US, alleging that the exchange was involved in the sale of unregistered securities and accused Binance and its founder of participating in a complex conspiracy that involved fraud, conflicts of interest, a lack of disclosure and willful disregard for the law.

One of the allegations was that the exchange diverted customer assets at their discretion, including sending money to the Switzerland-based Sigma Chain under that was Zhao’s control.

During a Nov. 27 hearing in federal court, attorneys for Binance.US reportedly argued the securities regulator has no evidence that assets have been misused, asking U.S. Magistrate Judge Zia Faruqui to consider ceasing the securities regulator’s investigation for potential fraud.

X (Twitter) post from an observer about the Binance, SEC situation. Source: X

Binance.US attorney Matthew Laroche also cited ballooning costs of the lawsuit, noting that Binance.US assets have plunged almost 90% and that its user base has halved since the SEC filed the lawsuit.

The request came as Binance and CZ agreed to plead guilty to breaking U.S. anti-money laundering laws as part of a $4.3 billion settlement with the U.S. Justice Department, Treasury and Commodity Futures Trading Commission (CFTC) last week.

However, the U.S. Justice Department’s case didn’t include any of the SEC’s fraud-related claims stemming from its lawsuit with the cryptocurrency exchange in June.

Binance.US, SEC asked to resolve dispute

Judge Faruqui, who is presiding over the Binance and SEC case, reportedly said the guilty pleas make it less likely that Binance.US and CZ misappropriated customer assets.

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

Faruqui has asked Binance.US and the SEC to resolve the dispute and update him by Dec. 15.

Related: Binance CEO CZ’s downfall is ‘the end of an era’ — Charles Hoskinson

Meanwhile, CZ is currently awaiting a court review to find out whether he can leave the U.S. now and return two weeks before his sentencing date, scheduled for sometime in February.

The judge ordered that CZ would not be permitted to travel to the United Arab Emirates — where CZ is primarily based — until a court ruled on a motion for review from the U.S. government.

CZ could face up to 18 months in prison under federal sentencing guidelines.

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