Binance And The SEC Reached Agreement In Court!

The deal imposes extensive disclosure obligations on BinanceUS and the strict separation of client funds from the parent company. However, the assets will not be frozen.

According to court documents, the U.S. offshoot of crypto exchange Binance and the U.S. Securities and Exchange Commission (SEC) have agreed on a deal. Accordingly, a judge in the U.S. blessed the agreement, which ensures the protection of customer assets and allows BinanceUS to continue operating for the time being. The U.S. Securities and Exchange Commission had previously attempted to freeze customer assets out of concern that Binance might pull them. However, Binance was able to avert that with the recent settlement.

As Binance CEO Changpeng Zhao (CZ) explained on Twitter, the judge found the SEC’s concerns without merit. Meanwhile, as part of the deal, BinanceUS commits to strictly separate access to private keys, hardware wallets and web tools from the international parent company. This would also require the creation of entirely new wallets, to which only Binance US employees would have access.
According to the statement, U.S. customers would still be guaranteed a payout of their assets. These, along with “all user deposits on all Binance platforms,” have always been safe, CZ said on Twitter. Meanwhile, according to ex-SEC employee John Reed Stark on Twitter, the deal could prove overly “burdensome” for Binance.
Accordingly, BinanceUS must disclose extensive records of user wallets, transfers and related financial service providers to the SEC. The latter thus has a de facto “advisory role”, which Stark classifies as an evident success for the SEC. In violating the imposed disclosure requirement, Stark said the crypto exchange faces intervention by the U.S. Department of Justice.
Meanwhile, the broader legal battle will move forward. In addition to selling unregistered securities, the SEC accuses BinanceUS of misusing funds and lying to regulators.

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