Binance, Binance.US, and the SEC Reach Agreement
On Friday, June 16, it was reportedly agreed upon by Binance, Binance.US, and the United States Securities and Exchange Commission (SEC) that access to customer funds should be limited temporarily to Binance.US employees only.
Reports have indicated that the proposed agreement, subject to the approval of the federal judge in charge, outlines measures for Binance.US to stop any Binance officials from gaining access to private keys of wallets, hardware wallets, or root access to Binance.US’s Amazon Web Services tools. Furthermore, the U.S.-based crypto trading platform will be disclosing comprehensive details regarding its business expenses, including estimated costs, in the near future.
SEC’s Motion to Freeze Assets and Binance.US’s Response
The SEC filed a motion seeking to freeze all of Binance.US’s assets during the legal proceedings, prompting the emergence of an agreement. The regulatory body was concerned that without a temporary restraining order, funds could be moved abroad or crucial documents could be deliberately destroyed.
However, Binance.US’s lawyers vehemently argued against this idea, claiming that a full freeze on all assets would be tantamount to an overly harsh “death sentence” for the company.
At a hearing earlier in the week, Judge Amy Berman Jackson of the U.S. District Court suggested that it would be more beneficial for the parties to reach an agreement on a proposed stipulation than to have the court generate a restraining order. She highlighted that a restraining order only lasts for two weeks, which might be insufficient for a thorough hearing, especially with the large number of submitted exhibits, which total more than 4,000 pages.
Binance is reportedly being investigated in France since February 2022.
The proposed agreement has additional stipulations, such as the development of new crypto wallets by Binance.US that will be off-limits to employees of other Binance entities. In addition, Binance.US has pledged to offer extra data to the SEC and has consented to an expedited discovery timeline. Notably, U.S. customers will still be able to withdraw their money during this time.
If the proposed agreement is accepted, it will partially resolve the SEC’s worries while the lawsuit continues. Recently, the SEC brought a suit against Binance and Binance.US for dealing in unregistered securities and also accused them of pooling funds together and not following proper procedures. However, the proposed agreement does not encompass the entire lawsuit.
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