The Securities and Exchange Commission (SEC) has reached a deal with Binance and Binance.US to circumvent the need for an asset freeze, limiting access to US customers' funds only to Binance.US employees. Additionally, the United States district court Judge Amy Berman Jackson approved the agreement on Saturday.
SEC and Binance Reached a Deal
Under the agreement, the US affiliate of Binance has to ensure that none of the officials from Binance Holdings, the global exchange, have access to private keys for wallets or hardware wallets. Binance.US needs to create new crypto wallets to which they only have access and move US customers' funds to them.
Further, none of the Binance Holdings officials can have root access to Binance.US's Amazon Web Services tools. In the meantime, US customers will be allowed to withdraw their funds.
Binance's CEO, Zhao tweeted that agreements were reached on "mutually acceptable terms."
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…
— CZ ???? Binance (@cz_binance) June 17, 2023
Binance.US Avoids Asset Freeze
These restrictions came as the SEC alleged that Binance.com and its CEO, Changpeng Zhao controlled the US operations despite not holding any executive role in the country. Zhao is also the majority owner of Binance.US.
In addition to the limitation of access, the US-based crypto exchange must share detailed information about its business expenses with the regulator.
The SEC sued Binance, its two US affiliates, and Changpeng Zhao earlier this month over allegations of operating illegal trading platforms, offering unregistered crypto asset securities, and commingling customers' funds.
On top of that, the regulator filed a motion in the court seeking an asset freeze of BAM Management US Holdings and BAM Trading Services, the holding and operating firms for Binance.US, concerning that the exchange can move its customer funds to offshore wallets. However, the exchange said that such an order would mean a "death penalty" for its operations.
The representatives of the SEC and the Binance entities sat down at the table as a judge rejected a temporary asset freeze last Tuesday and forced them to negotiate a way out of it.
We want to provide an update on the current battle https://t.co/AZwoBOh0gq finds itself in with the SEC. We are pleased to inform you that the Court did not grant the SEC’s request for a TRO and freeze of assets on our platform which was clearly unjustified by both the facts and…
— Binance.US ???????? (@BinanceUS) June 17, 2023
Meanwhile, Binance is facing troubles outside the US. Its regulated French unit reportedly faces a probe over the 'illegal' provision of crypto services and money laundering.
This article was written by Arnab Shome at www.financemagnates.com.
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