Binance, the world’s largest cryptocurrency exchange, has reached an agreement with the U.S. Securities and Exchange Commission (SEC) to keep its American customers’ funds within the United States until the resolution of a legal case against the company. Subject to approval from a federal judge, the agreement will ensure that only personnel from Binance.US will have access to the funds of U.S. customers.
The SEC filed a lawsuit against Binance, its CEO Changpeng Zhao, and the entity operating Binance.US on June 5. The regulatory body has made several allegations against Binance, including manipulating the market, engaging in money laundering, failing to block U.S. customers, and providing false information to investors about market oversight regulations. There has been an increased crackdown on the cryptocurrency industry by U.S. authorities, and this case, along with the one filed against major U.S. exchange Coinbase, is indicative of this trend.
While the legal proceedings are ongoing, Binance and the SEC have reached an agreement to protect the funds of Binance.US users. Binance.US will implement measures to safeguard these assets by preventing Binance Holdings employees from accessing Binance.US’s private keys for wallets and Amazon Web Services tools. Given that Binance is responsible for customer funds, the SEC emphasized the importance of these measures in protecting investor assets.
The SEC has obtained an emergency relief order to protect Binance.US users and ensure their access to withdrawals. The purpose of the order is to keep customer funds separate from those of Binance and its CEO. According to the SEC’s director of enforcement, these restrictions are vital for safeguarding investor funds.
Despite the urgent appeals from the SEC, Binance has not yielded. However, the company was pleased to resolve the dispute amicably. All platforms affiliated with Binance ensure the safety of customer funds.
The proposed agreement encompasses more than just asset protection measures. New cryptocurrency wallets can be created on Binance.US, and they will be inaccessible to Binance staff. The company has also agreed to an accelerated discovery timetable and will provide additional information to the SEC. These steps are expected to address the SEC’s concerns and lead to the resolution of the lawsuit.
Binance’s agreement with the SEC to keep U.S. customer assets within the country exemplifies the ongoing regulatory scrutiny that the cryptocurrency industry is facing. Preserving the assets of Binance.US users and their ability to withdraw funds remains a priority as the SEC litigation progresses. Binance has demonstrated its commitment to safeguarding investor interests through various security measures, such as restricting access to assets and creating new wallets.
Originally reported on Reuters
