Binance, Binance.US, and the Securities and Exchange Commission (SEC) announced on Friday a proposed agreement that seeks to ensure the security of customer funds held by Binance.US in the short term. The deal is still pending approval from a federal judge overseeing the case.
The proposed deal aims to address SEC’s concerns while the broader lawsuit unfolds
As part of the proposed agreement, Binance.US will take significant measures to prevent officials from Binance Holdings (referring to the global exchange) from accessing private keys for its wallets, hardware wallets, or obtaining root access to Binance.US’s Amazon Web Services tools. This step aims to provide enhanced security and prevent any unauthorized access to customer funds.
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Additionally, Binance.US has committed to sharing detailed information about its business expenses, including estimated costs, in the coming weeks. This move is intended to address concerns raised by the SEC regarding the alleged commingling of funds and poor practices.
The proposed agreement comes as a response to an SEC motion to freeze all of Binance.US’s assets during the ongoing securities-related lawsuit against the exchange. The SEC expressed concerns that funds could be moved offshore or records could be destroyed if a temporary restraining order (TRO) was not granted. However, Binance.US’s legal representatives argued that freezing all assets would be excessively punitive.
If accepted, the proposed agreement will provide a framework for addressing the SEC’s immediate concerns while the broader lawsuit continues through the judicial system. It is important to note that the proposed agreement does not specifically address the allegations mentioned in the broader suit filed by the SEC.
The SEC filed a lawsuit last week against both Binance and Binance.US, accusing them of offering and trading unregistered securities. The lawsuit also alleged widespread commingling of funds and questionable practices. The lawsuit will proceed separately and is not directly affected by the proposed agreement between Binance.US and the SEC.
There has been an agreement between SEC and Binance
Both Binance and Binance.US have been cooperating with the SEC throughout the legal proceedings and have expressed their commitment to complying with regulatory requirements in the United States.
The agreement, if approved, is seen as a step toward establishing a more secure and compliant environment for the operation of cryptocurrency exchanges in the United States. It highlights the ongoing efforts by regulators to address concerns related to investor protection and the proper handling of digital assets.
As the case develops, it will be closely watched by the cryptocurrency community, industry participants, and regulators as they seek to strike a balance between innovation, investor safeguards, and regulatory oversight in the evolving landscape of digital assets and blockchain technology.
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