Binance, Binance.US and the U.S. Securities and Exchange Commission (SEC) reportedly agreed on Friday, June 16, to temporarily limit access to customer funds to only Binance.US employees.
Reportedly, the proposed agreementPending approval by a supervising federal judge, outlines Binance.US measures to prevent Binance affiliates from accessing wallets, hardware wallet private keys, or root access to Binance.US’s Amazon Web Services tools. are doing. Additionally, the US-based cryptocurrency trading platform plans to disclose comprehensive information on its operating expenses, including estimated costs, in the coming weeks.
The agreement emerged as a direct response to a motion filed by the SEC seeking to freeze all of Binance.US’ assets during ongoing legal proceedings. Regulators have expressed concern that failure to grant a temporary restraining order could pose a risk that funds could be transferred abroad or that sensitive records would be intentionally destroyed.
However, legal representatives of Binance.US strongly opposed this idea, arguing that a complete freeze of all assets would essentially amount to an overly heavy “death penalty” for the company.
At a hearing earlier this week, U.S. District Court Judge Amy Berman-Jackson advised parties that it would be more advantageous to reach an agreement on the proposed provisions rather than relying on courts to formulate restraining orders. bottom. The judge stressed that the temporary restraining order is limited to two weeks, which may not be sufficient for a comprehensive hearing. This is especially true considering the sheer volume of submissions, over 4,000 pages.
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The proposed agreement includes additional terms, such as the creation of new cryptocurrency wallets by Binance.US, which will be inaccessible to employees of other Binance entities. Additionally, Binance.US commits to provide additional information to the SEC and agrees to an expedited discovery schedule. In particular, US-based customers will be able to withdraw their funds throughout this period.
If accepted, the proposed agreement would partially address the SEC’s concerns while broad litigation would proceed. The SEC recently sued Binance and Binance.US for alleging improper practices and commingling of unregistered securities trading and funds. However, the draft agreement does not include extensive litigation.
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