Binance and SEC Reach Agreement to Repatriate All U.S. Customer Funds and Wallet Keys

SEC's Response to Challenge Groundbreaking XRP Ruling

U.S. Fed's Vice Chair Barr Suggests CBDC Decision Remains a ‘Long Way’

Turkish Crypto Exchange Thodex CEO Faruk Özer Sentenced to 11,196 Years in Prison for Collapse

Binance, Binance.US, and the Securities and Exchange Commission (SEC) have recently reached an agreement to implement enhanced measures, ensuring that only authorized Binance.US employees have temporary access to customer funds.

As per the pending agreement, pending approval from the federal judge presiding over the matter, Binance.US will implement measures to prevent any officials from Binance Holdings, the global exchange, from having access to private keys for wallets or hardware wallets, as well as root access to Binance.US's Amazon Web Services tools. Additionally, the U.S.-based cryptocurrency trading platform will provide comprehensive information regarding its business expenses, including estimated costs, in the forthcoming weeks.

The proposed agreement is a response to the Securities and Exchange Commission's (SEC) request to freeze all assets belonging to Binance.US as it proceeds with securities-related charges against the exchange. The regulator expressed concerns that funds could be transferred offshore or records could be destroyed if a temporary restraining order (TRO) was not granted. Binance.US's legal representatives argued against the complete freezing of assets, asserting that it would be equivalent to imposing the "death penalty."

Judge Amy Berman Jackson, presiding over the District Court for the District of Columbia, suggested that it would be more advantageous for the involved parties to reach a consensus on a proposed stipulation rather than requiring her to draft a restraining order with a limited timeframe of two weeks. Considering the extensive amount of evidence already submitted by the parties, consisting of over 4,000 pages of exhibits, the judge emphasized that this two-week period would be inadequate for adequate preparation. These remarks were made by Judge Jackson during a recent court hearing.

In addition to the aforementioned terms, the proposed agreement includes several other provisions aimed at enhancing transparency and compliance. Binance.US will establish exclusive cryptocurrency wallets inaccessible to its global employees, furnish the SEC with supplementary information, and consent to an accelerated discovery timeline.

Customers based in the United States will retain the ability to withdraw funds throughout this period.

If accepted, the proposed agreement will help alleviate some of the concerns raised by the SEC while the ongoing lawsuit progresses through the judicial system. Last week, the SEC filed a lawsuit against Binance and Binance.US, accusing them of offering and trading unregistered securities and highlighting the mishandling of funds and other improper practices. However, it should be noted that the proposed agreement does not directly address the broader lawsuit.

In a press release, SEC Director of Enforcement Gurbir Grewal said, "Given that Changpeng Zhao and Binance have control of the platforms’ customers’ assets and have been able to commingle customer assets or divert customer assets as they please, as we have alleged, these prohibitions are essential to protecting investor assets. Further, we ensured that U.S. customers will be able to withdraw their assets from the platform while we work to resolve the alleged underlying misconduct and hold Zhao and the Binance entities accountable for their alleged securities law violations."