Bitcoin Exchange Binance Announces Settlement Agreement with SEC

• Binance, Binance US, and the SEC announced an agreement to ensure that only Binance US employees can access customer funds.
• The proposed agreement came in response to the SEC’s request to freeze all of Binance US’s assets while monitoring the exchange for securities-related charges.
• Columbia District Court Judge Amy Berman Jackson stated that it would be better for the parties to reach a proposed agreement rather than issuing a court order.

Binance, Binance US, and the SEC announced that they have reached an agreement regarding the case. The SEC’s request to freeze assets had caused fear in the market.

Binance and SEC Very Close to an Agreement

Binance, Binance US, and the Securities and Exchange Commission (SEC) announced an agreement to ensure that only Binance.US employees can access customer funds.

According to the proposed agreement, which requires approval from the federal judge overseeing the case, Binance US will take steps to ensure that Binance Holdings officials do not have root access to various wallets, hardware wallets, or Binance US’s Amazon Web Services tools. Additionally, Binance US will share detailed information about its expenses, including estimated costs in the coming weeks.

The proposed agreement came in response to the SEC’s request to freeze all of Binance US’s assets while monitoring the exchange for securities-related charges. The regulator expressed concerns that funds could be transferred overseas or records could be destroyed if a temporary court order was not issued. Binance.US’s lawyers opposed the freezing of all assets, stating that it would be equivalent to a “death penalty.”

Columbia District Court Judge Amy Berman Jackson stated that it would be better for the parties to reach a proposed agreement rather than issuing a court order, and she mentioned a two-week deadline for a more comprehensive hearing. She noted that this timeframe would not be sufficient, considering the more than 4,000 pages of documents already submitted by the parties during a hearing held this week.

Other provisions included in the proposed agreement are Binance US creating new crypto wallets that are not accessible to global exchange employees, providing additional information to the SEC, and agreeing on an accelerated discovery schedule. During this time, US-based customers will be allowed to withdraw funds.

SEC’s Targeting of Binance Deeply Affected the Market

The SEC filed a lawsuit against Binance and Binance US for offering and trading unregistered securities, as well as alleging significant commingling of funds and misconduct. The proposed agreement does not address the broader scope of the lawsuit.

During the lawsuit, there were sharp declines in Bitcoin and cryptocurrencies, and concerns grew. With the SEC’s request to freeze Binance US assets, fear in the market increased, but later the court did not see the need to freeze Binance US assets and requested cooperation between the SEC and Binance.

At this point, it appears that the SEC has approved the idea of not freezing assets. When a clearer picture emerges in the coming days, the direction of cryptocurrencies may become clearer.