A federal judge approved a temporary agreement between the U.S. Securities and Exchange Commission (SEC), Binance (a global crypto exchange), and its U.S. branch.
The agreement requires Binance.US to take steps to ensure that only its local employees can access customer funds. This arrangement was made while the SEC lawsuit against Binance is being addressed. The judge also instructed the parties to propose timelines for the overall lawsuit.
Under the agreement, Binance.US will implement measures to prevent officials from Binance Holdings, the world’s largest cryptocurrency exchange, from accessing private keys, hardware wallets, or Binance.US's Amazon Web Services tools. The U.S.-based trading platform will also provide detailed information about its expenses in the coming weeks.
The agreement was prompted by the SEC's motion to freeze all of Binance.US's assets during the securities-related charges case.
The SEC was concerned that funds might be moved offshore or records destroyed if they didn't obtain a temporary restraining order. Binance.US's lawyers opposed this, arguing that freezing all assets would be excessively punitive.
Judge Amy Berman Jackson of the Columbia of the District Court advised the parties to reach an agreement rather than having her impose a restraining order with a two-week time limit. She explained that two weeks would not be sufficient given the extensive exhibits already filed, totaling over 4,000 pages.
The proposed agreement includes additional provisions such as creating new crypto wallets inaccessible to global employees, providing more information to the SEC, and agreeing to an expedited discovery schedule. During this time, U.S.-based customers will still be able to withdraw their funds.
The SEC's director of enforcement, Gurbir Grewal, stated in a press release that the restrictions imposed in the agreement are essential to protect investor assets, given the alleged control and misuse of customer funds by Changpeng Zhao and Binance.
Binance.US complained in a tweet that the ongoing legal dispute with the regulator has harmed its business and reputation, underlying its determination to defend itself against “unjustified charges.” It assured that user funds are have always been safe and secure across all Binance-related platforms.
Founded in 2017 by Chinese-born Canadian businessman, investor, and software engineer Changpeng Zhao, Binance Holding Ltd. now has a market capitalization is almost 4.3 billion US dollars. The 30 million customers using Binance platforms in around 180 countries (17 languages) generated last year a trading volume exceeding 7.7 trillion US dollars. In addition to its native cryptocurrency BNB it supports transactions with 500 other cryptocurrencies and thousands of tokens.