Key takeaways:
- The proposed actions include reporting company expenses and limiting access to private keys for Binance Holdings employees.
- Consumers based in the US will continue to be able to withdraw money throughout this time.
The Securities and Exchange Commission (SEC) and Binance US apparently reached a temporary deal late on Friday, June 16, confining access to customer cash to only Binance US staff.
The proposed deal reportedly details steps for Binance US to prohibit any access by Binance Holdings personnel to hardware wallets, private keys for wallets, or root access to Binance US’s Amazon Web Services tools, pending approval from the supervising federal judge. In the following weeks, the US-based cryptocurrency trading platform will also reveal thorough details on operational expenses, including expected costs.
The proposed deal is a direct reaction to a motion made by the SEC, which sought to freeze all of Binance US’s assets throughout the ongoing legal procedures, including allegations relating to securities. Without an approved Temporary Restraining Order (TRO), the regulatory authority expressed concern about the risk of money being transported overseas or vital records being purposefully destroyed.
However, legal counsel for Binance US vehemently disagreed with this idea, arguing that enforcing a total asset freeze would practically inflict an unduly harsh “death penalty” on the firm.
Additional clauses in the proposed agreement call for Binance US to create new cryptocurrency wallets that won’t be usable by the global exchange’s staff. Binance US also promises to cooperate with a faster discovery timetable and give the SEC more information. Notably, consumers based in the US will continue to be able to withdraw money throughout this time.
If approved, the proposed settlement will partially alleviate the SEC’s worries while the larger legal action proceeds. The SEC recently filed a lawsuit against Binance and Binance US for trading unregistered securities, including improper fund-mixing and other violations. The proposed settlement, however, excludes the bigger complaint.
Judge Amy Berman Jackson, who presides over the District Court for the District of Columbia, told the parties involved in a hearing earlier this week that it would be better for them to agree on a proposed stipulation rather than relying on her to create a restraining order. The judge emphasized that because temporary restraining orders are only valid for two weeks, an in-depth hearing may not be possible.
