Cryptocurrency: Binance closes deal for client assets – 06/17/2023 – Market

Binance, the world’s largest cryptocurrency exchange, and Binance.US have reached an agreement with the SEC (US Securities and Exchange Commission) to ensure that US customers’ assets remain in the United States until that a lawsuit filed by the regulatory agency this month is resolved.

The settlement, revealed in court documents filed late on Friday, still requires approval from the federal judge overseeing the litigation. To ensure that US clients’ assets are not transferred abroad, the agreement allows only Binance.US employees to access those assets.

On June 5, the SEC sued Binance, its CEO and founder, Changpeng Zhao, and the operator of Binance.US, alleging that Binance artificially inflated its trading volume, embezzled client funds, failed to restrict clients from USA from its platform and misled investors about its market surveillance controls.

The lawsuit and another filed by the SEC the following day against major US exchange Coinbase represent a dramatic escalation in tighter oversight by US regulators over the industry.

Under the settlement, which does not resolve the SEC lawsuit, Binance.US will take steps to ensure that no Binance Holdings authority has access to private keys for several of its wallets, hardware wallets, or root access to Binance.US tools on Amazon. Web Services, according to court documents.

The SEC said in a statement released Saturday that the emergency order granted to Binance.US customers will protect their assets and ensure they can continue to withdraw those assets.

“Given that Changpeng Zhao and Binance have control of the platform’s customer assets and can mix customer assets or divert customer assets as they see fit… these bans are essential to protect investor assets,” said Gurbir Grewal, director of the SEC’s Division of Enforcement, in a statement.

A Binance spokesperson released a statement on Saturday: “While we maintain that the SEC’s emergency relief request was wholly unwarranted, we are pleased that the disagreement over this request has been resolved on mutually acceptable terms. User funds have been and always have been will be secure on all Binance-affiliated platforms.”

Binance’s US affiliate halted dollar deposits last week and gave customers a June 13 deadline to withdraw their dollar funds after the SEC asked a court to freeze their assets.