SEC Reaches Compromise with Binance to Protect Customer Assets Amid Legal Battle
In a late Friday development, the Securities and Exchange Commission (SEC) has reached an agreement with Binance, the world’s largest cryptocurrency exchange, allowing it to continue operating in the United States and safeguard customer assets amidst an ongoing government lawsuit.
Following the SEC’s fraud charges against Binance on June 5, the regulatory body sought to freeze the exchange’s U.S. assets, a move that Binance’s legal team argued would force the company out of business in the United States.
However, in a court filing on Friday, the SEC stated that both parties had reached a compromise following several days of court-ordered mediation. On Saturday, Judge Amy Berman Jackson, presiding over the case in federal court in Washington, approved the agreement.
Under the terms of the agreement, customer funds held by Binance.US, an affiliate of the larger offshore exchange, would be placed in special digital repositories accessible solely to the U.S. exchange. These funds would not be accessible to Binance’s international operation or its founder, Changpeng Zhao. The agreement allows Binance.US to transfer company assets exclusively for ordinary business expenses and obligations.
Binance responded on Saturday, stating, “Although we maintain that the SEC’s request for emergency relief was entirely unwarranted, we are pleased that the disagreement over this request was resolved on mutually acceptable terms.”
Gurbir Grewal, the SEC’s director of enforcement, commented, “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.”
This asset dispute between Binance and the SEC is part of a consequential legal battle that could shape the future of the cryptocurrency industry in the United States.