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The U.S. SEC and Binance have signed an unprecedented agreement to expedite litigation and ensure U.S. client assets stay in the country, according to June 16. Court submission.
Judge Amy Jackson approved the agreement, but rejected the SEC’s request to freeze Binance US’s assets through a Temporary Injunction (TRO). He had previously told the parties to negotiate an agreement to avoid a total asset freeze.
The SEC requested an asset freeze over concerns about commingling of funds and concerns about exchanges moving assets out of the United States.
SEC Executive Director Gurbil Grewal said: statement June 17th:
Considering that Changpeng Zhao and Binance control customer assets on the platform, as we argue, and can freely mix and divert customer assets, these prohibitions are It is essential to protect our assets.
Binance.US and CZ have denied all allegations, saying the SEC is using heavy-handed tactics to crush the cryptocurrency industry.
Binance.US said: statement After contract approval:
There has never been any evidence presented by the SEC regarding misappropriation of customer assets. I admitted no.”
The agreement, called the Proposed Provisions and Consent Order, essentially allows Binance.US to continue business as usual despite the lawsuit.
In addition, it will sever ties between Binance Holdings and Binance US (formally known as BAM Trading in legal documents). It also includes a provision to “repatriate” all assets that may have originated in the United States and may have been relocated abroad.
The agreement includes an emergency asset relief clause requested by the SEC, allowing Binance.US customers to access the platform and withdraw funds during the litigation.
Gurwal said:
We have ensured that US customers will be able to withdraw assets from the platform while we work to resolve the underlying fraud allegations.
Binance.US will be the sole overseer of the fund and will also be tasked with ensuring that Binance Holdings personnel cannot access wallets, private keys and Amazon Web Services tools.
The deal also stipulates that Binance.US will move all customer funds into a new wallet accessible only to its employees. Furthermore, Binance.US can only use the funds it needs for its essential day-to-day operations.
The cryptocurrency community has speculated that it could be months, if not years, before the SEC lawsuits against Coinbase and Binance are resolved. This has led many industry players to consider focusing their growth efforts outside the United States.
However, the Consent Order will expedite the Binance litigation process with the SEC by requiring all defendants to submit expedited discovery and depositions to the SEC, significantly shortening the time it takes to reach a conclusion. It is an object.
It also requires Binance.US to provide verified written accounts of all accounts and transfers made between December 31, 2022 and the accounting date.
Judge Jackson, who is overseeing the Binance and SEC litigation, will make a preliminary ruling on whether certain cryptocurrencies are in fact legal securities as part of the lawsuit.
Tokens that the SEC has named as securities in its lawsuit against two exchanges include Cardano, Solana, Polygon, and BNB.
Preliminary decisions on these tokens are likely to have far-reaching implications for the U.S. crypto industry.
