Binance, SEC Agree to Retain US Assets

Binance, the world's top cryptocurrency exchange, and its US affiliate, Binance.US, have taken a huge step forward by reaching an agreement with the US Securities and Exchange Commission (SEC). The major goal of this agreement is to guarantee that assets belonging to US consumers stay in the nation until the regulatory body's recent comprehensive lawsuit is resolved.

The terms of the deal, which were made public in court records filed late Friday, are presently awaiting approval from the federal judge presiding over the dispute. To guarantee that U.S. customer assets do not move offshore, the agreement stipulates access to these assets to Binance.US employees only.

The SEC took legal action against Binance, Changpeng Zhao, the CEO and founder of the company, and the operator of Binance.US on June 5. The lawsuit's allegations consist of charges of Binance inflating its trading volumes artificially, misappropriation of customer funds, a failure to enforce restrictions for U.S. customers on its platform, and providing inaccurate information about its market surveillance controls to investors.

This lawsuit together with another filed the following day against a major U.S. exchange, Coinbase, signals a significant increase in the level of industry scrutiny by U.S. regulatory bodies.

The agreement, which does not resolve the SEC lawsuit, commits Binance.US to implement measures ensuring that no Binance Holdings officials can access private keys for its array of wallets, hardware wallets, or gain root access to Binance.US's Amazon Web Services tools, according to the court documents.

The SEC, in a statement released on Saturday, stated that the emergency relief order obtained for Binance.US customers would protect their assets and ensure uninterrupted access to asset withdrawals.

Gurbir Grewal, the director of the SEC's enforcement division, emphasized in the statement, “Given that Changpeng Zhao and Binance have control of the platforms' customers' assets and have been able to commingle customer assets or divert customer assets as they please ... these prohibitions are essential to protecting investor assets.”

A Binance representative, in a statement issued on Saturday, declared, “Although we maintain that the SEC's request for emergency relief was entirely unwarranted, we are pleased that the disagreement over this request was resolved on mutually acceptable terms. User funds have been and always will be safe and secure on all Binance-affiliated platforms.”

The proposed agreement further dictates that Binance.US will establish new crypto wallets inaccessible to the global exchange's employees, provide supplementary information to the SEC, and agree to an expedited discovery schedule, as outlined in the court filings.

Binance's U.S. subsidiary suspended dollar deposits last week and set a withdrawal deadline for customers' dollar funds on June 13, in the wake of the SEC's request for a court to freeze its assets.

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