Binance.US Temporarily Restricts Access to Funds in SEC Agreement

Binance, Binance.US, and the United States Securities and Exchange Commission (SEC) have reportedly reached a temporary agreement on Friday, June 16, limiting access to customer funds exclusively to Binance.US employees, according to sources familiar with the matter.

The proposed agreement, pending approval from the overseeing federal judge, includes measures aimed at preventing Binance officials from accessing private keys of wallets, hardware wallets, or root access to Binance.US's Amazon Web Services tools.

Additionally, the U.S.-based cryptocurrency trading platform will disclose comprehensive information on business expenses, including estimated costs, in the coming weeks.

This agreement is a direct response to a motion filed by the SEC, which sought to freeze all of Binance.US's assets during the ongoing legal proceedings.

The regulatory body expressed concerns that without a granted temporary restraining order, there could be a risk of funds being transferred offshore or crucial records being intentionally destroyed.

Binance.US's legal representatives strongly opposed the idea, arguing that a complete freeze on all assets would be akin to administering an excessively severe "death penalty" to the company.

During a hearing earlier in the week, U.S. District Court Judge Amy Berman Jackson advised the parties involved that it would be more beneficial to agree on a proposed stipulation rather than relying on the court to issue a restraining order.

The judge emphasized that a temporary restraining order has a limited duration of two weeks, which may not be sufficient for a comprehensive hearing, especially considering the substantial volume of exhibits submitted, totaling over 4,000 pages.

The proposed agreement includes additional provisions, such as the creation of new crypto wallets by Binance.US, which will be inaccessible to employees of other Binance entities.

Moreover, Binance.US commits to providing additional information to the SEC and agrees to an accelerated discovery schedule. Notably, U.S.-based customers will still be able to withdraw funds during this period.

If approved, the proposed agreement will partially address the SEC's concerns while the broader lawsuit continues.

The SEC recently filed a lawsuit against Binance and Binance.US, alleging the trading of unregistered securities, commingling of funds, and poor practices. However, it is important to note that the proposed agreement does not cover the broader lawsuit.

Previous Next

This information is for educational purposes only and does not constitute investment advice. No person should rely on it to make any investment. Investing carries risks, including the loss of capital. All opinions expressed are subject to change without notice. Past performance is not indicative of future results. Always seek the advice of a licensed investment professional before making any investment.